Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
Textbook Question
Book Icon
Chapter 19, Problem 25CTQ

Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which sometimes change dramatically in a short period of time, be misleading?

Blurred answer
Students have asked these similar questions
Which GDP result (current or constant) is more appropriate for comparative purpose with other countries?
Kindly answer in narrative form. Please cite your sources. Thank you so much!1. What are the GNP and Per capita GNP in Denmark?2. What Type of Currency does Denmark have? and what is the relation to US Currency?
Suppose we compare GDP per person in Botswana and the United States in two ways: first using the nominal exchange rate and then again using the relative price-based conversion. The GDP per person in Botswana calculated using the exchange rate method is $800 while that calculated using the relative price-based conversion is $1,000. What is the relative price ratio between Botswana and the U.S. (i.e., the price level for Botswana relative to the United States)? Round your answer to the nearest two-decimal digit number. For instance, if your numerical answer is 1.458, enter 1.46 in the space below.    Note:-   Do not provide handwritten solution. Maintain accuracy and quality in your answer.  Take care of plagiarism. Answer completely. You will get up vote for sure.

Chapter 19 Solutions

Principles of Economics 2e

Additional Business Textbook Solutions

Find more solutions based on key concepts
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Text book image
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Text book image
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Text book image
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning