Without Adjusting for PPP,emerging Economies Contribute About 30% of the Global

question 13

Multiple Choice

Without adjusting for PPP,emerging economies contribute about 30% of the global GDP.Adjusting for PPP,they now contribute approximately 50% of the global GDP.The reason there is a huge difference between the two measures is because 

• A) the cost of living in emerging economies tends to be lower than that in developed economies. 
• B) the purchasing power parity is much higher in emerging countries. 
• C) the population in emerging economies is much higher than that in developed economies. 
• D) the deficit spending in emerging economies is much larger than that in developed economies.

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Definitions:

Indirect Materials

Materials used in the production process but not directly traceable to a specific product, such as lubricants and adhesives used in machinery.

Direct Materials Cost

The expense associated with the raw materials and components used in the manufacturing of a product.

Work In Process

Inventory that includes goods that are in the production process but are not yet completed, representing a component of a manufacturing company's current assets.

Manufacturing Overhead Cost

Expenses related to the manufacturing process that cannot be directly traced to individual products, such as factory rent, utilities, and equipment depreciation.