PPP-Adjustment

question 34

Multiple Choice

PPP-adjustment:

• A) gives us a more realistic sense of differences in living standards around the world.
• B) only adjusts the values of tradable goods.
• C) inflates the incomes of people in wealthier countries.
• D) focuses on changes in input prices around the world.

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Definitions:

Sum-Of-The-Years'-Digits Depreciation

A method of depreciation that results in a more accelerated write-off of the asset than the straight-line method, basing the expense on a fraction that decreases year by year.

Useful Life

The estimated duration an asset is expected to be economically viable or productive.

Composite Depreciation Method

A method used to depreciate a group of assets that have different lives and uses as one single asset, applying a uniform depreciation rate.