Economics (AS & A Level) · Oct / Nov 2022 · Paper 33 · Question 20

Real GNP per capita is often used when comparisons of living standards are made between a developed and a developing country. What is not a good reason to question the accuracy of this comparison of living standards?

1. AIt is not possible to use price indices accurately when computing real figures because spending patterns are different.
2. BPeople in developed countries enjoy very different amounts of leisure time to people in developing countries.
3. CThe extent of the unrecorded economy is very different in the two countries.
4. DThe purchasing power parity theory has been used to make comparisons.

As printed in the paper