PPP-Adjustment

question 23

Multiple Choice

PPP-adjustment:

• A) gives us a more realistic sense of differences in living standards around the world.
• B) allows us to see that poorer countries are not quite so poor as suggested by their nominal GDP per capita.
• C) gives us a realistic sense of how the living standards of the world's poorest citizens translate into dollar terms.
• D) All of these statements are true.

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Definitions:

Default Risk Premiums

Additional returns that investors demand from a security issuer to compensate for the risk of default.

Treasury Bond

A government-issued debt instrument with a guaranteed interest rate, intended for long-term investment, with a maturity period exceeding ten years.

Boeing

A multinational corporation based in the United States that specializes in designing, manufacturing, and marketing airplanes, helicopters, rockets, satellites, and telecommunications gear.

Caterpillar

A multinational corporation known for manufacturing construction and mining equipment.