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To compare living standards between two countries, we have to do the following: (a) Adjust for differences in fiscal policy. (b) Adjust for differences in currencies by using the exchange rate and then compare GDP in the two countries. (c) Adjust for population size and then compare GDP per capita in the two countries. (d) Adjust for differences in prices and then compare GDP per capita in the two countries. (e) Adjust for differences in currencies by using the exchange rate and then compare GDP per capita in the two countries using common prices

To compare living standards between two countries, we have to do the following: (a) Adjust for differences in fiscal policy. (b) Adjust for differences in currencies by using the exchange rate and then compare GDP in the two countries. (c) Adjust for population size and then compare GDP per capita in the two countries. (d) Adjust for differences in prices and then compare GDP per capita in the two countries. (e) Adjust for differences in currencies by using the exchange rate and then compare GDP per capita in the two countries using common prices

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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To compare living standards between two countries, we have to do the following:

(a) Adjust for differences in fiscal policy.

(b) Adjust for differences in currencies by using the exchange rate and then compare GDP in the two countries.

(c) Adjust for population size and then compare GDP per capita in the two countries.

(d) Adjust for differences in prices and then compare GDP per capita in the two countries.

(e) Adjust for differences in currencies by using the exchange rate and then compare GDP per capita in the two countries using common prices.

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