Economics (AS & A Level) · May / June 2026 · Paper 33 · Question 28

Country X's living standards were compared with country Y's living standards using real GNP per head converted into US dollars. Country X was ranked above country Y. Which factor might have caused this ranking to be incorrect?

1. AMarket exchange rates were used rather than purchasing power parity exchange rates.
2. BGovernment spending on transfer payments was higher in country Y than in country X.
3. CInflation was higher in country X than in country Y.
4. DThe distribution of income was more equal in country X than in country Y.

As printed in the paper