Comparisons of GDP levels across countries are least accurate when:
A)nonmarket activities are a small part of total economic activity.
B)prices differ across countries.
C)prices differ across countries and nonmarket activities are a large part of total economic activity.
D)purchasing power parity prevails.

Question

Quizplus · Accepted Answer

Comparisons of GDP levels across countries are least accurate when both prices differ across countries and nonmarket activities are a large part of total economic activity. This is because differences in prices can distort the real value of GDP when converted into a common currency, and significant nonmarket activities (which are not captured in GDP) can lead to underestimation of the actual economic output.

Comparisons of GDP Levels Across Countries Are Least Accurate When