397) Country A uses sterling and has a GDP per head of 30,000. Country B uses another currency. If this is converted to sterling at the current exchange rate, its GDP per head is 5,000. Which of the following statements is false?

To get a better comparison of output per head, it would be better to convert country B’s currency into sterling using purchasing power parities (PPPs)

If PPPs were used, it is most likely that B’s output per head would seem closer than it does using exchange rates

Exchange rates generally settle so that the prices of tradable products in each country are similar

PPPs are the rates which ensure that the prices of all products in each country are similar

Answer is:

PPPs are the rates which ensure that the prices of all products in each country are similar

Micro Economics MCQ (GK Set-1) with Answers

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Related Micro Economics MCQ (GK Set-1) with Answers

398) Suppose that, over time, the share of manufacturing industry in a country’s GDP falls. Which of the following statements is true? 1. The quantity of the goods and services produced by manufacturing industry must be falling. 2. The value of the go

Answer is:

Neither 1 nor 2

399) Which of the following statements is true? 1. Total welfare is affected by many factors including economic welfare. 2. Economic welfare refers to living standards

Answer is:

Both 1 and 2

400) Suppose that over the course of a decade an economy had a stable population and real GNDI increased by 20%. However, an economist estimates that economic welfare increased by less than 20%. Which of the following would not be a factor that could help to ex

Answer is:

Prices increased by more than 20%

401) Which of the following must always be equal?

Answer is:

Actual saving and actual investment in a four-sector economy

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