Using Exchange Rates Based on Purchasing Power Parity to Compare

Multiple Choice

Using exchange rates based on purchasing power parity to compare per capita incomes in developing and developed countries might lead one to conclude that people in developing countries:

A) are no worse off than if market exchange rates are used.
B) are worse off than if market exchange rates are used.
C) are better off than if market exchange rates are used.
D) do not use markets enough to make such a comparison feasible.