Without adjusting for PPP,emerging economies contribute about 26% of the global GDP.Adjusting for PPP,they now contribute approximately 45% 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.

Question

Quizplus · Accepted Answer

The cost of living in emerging economies tends to be lower than that in developed economies. This means that even though the nominal GDP of these economies might be lower, when adjusted for PPP, their contribution to the global GDP is much higher.

Without Adjusting for PPP,emerging Economies Contribute About 26% of the Global