Which of the Following Statements About the Comparison Between GDP

question 3

Multiple Choice

Which of the following statements about the comparison between GDP in China and in the United States is correct?

• A) Using the exchange rate to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States.
• B) Using purchasing power parity prices to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States.
• C) China's GDP per person is higher using purchasing power parity prices rather than the exchange rate when valuing China's GDP in dollars.
• D) None of the above answers are correct because they are all false statements.

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Definitions:

Risk-loving

A preference or inclination for taking on risks where the potential for gains outweighs the potential losses, as opposed to risk-aversion.

Risk-averse

describes an individual or entity that prefers to avoid risk and opts for the option with the least uncertainty.

Risk Premium

The additional return expected by an investor for taking on a higher level of risk compared with a risk-free investment.

Utils

A hypothetical unit of measurement used in economics to quantify the amount of utility or satisfaction gained by consuming goods and services.