One Way by Which the World Bank Converts Gross National

question 23

Multiple Choice

One way by which the World Bank converts gross national income (GNI) figures to dollars is to take the GNI in a local currency and convert using the exchange rate, averaged over a three-year period in order to smooth out the effects of currency fluctuations. Which of the following is a shortcoming of this method for international comparisons of standards of living?

• A) Currency exchange rates may fluctuate drastically from year-to-year.
• B) A country could have a relatively high standard of living but, for a variety of reasons, a low exchange rate.
• C) This method cannot be applied to countries that have fixed exchange rates.
• D) The method does not take into account trade conducted on the basis of barter.

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Definitions:

Sensorimotor Development

Sensorimotor development refers to the stage in early childhood where learning occurs through sensory experiences and manipulating objects.

Secondary Circular Reactions

Repetitive actions in infant development focused on external objects, part of Piaget’s stages of cognitive development.

Object Permanence

The recognition that items persist in existence even when they are not visible, audible, or detectable through other senses.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed (seen, heard, touched, smelled, or sensed in any way).