The Purchasing Power Parity Method of Comparing Income Levels Across

Multiple Choice

The purchasing power parity method of comparing income levels across countries

A) calculates the cost of purchasing a common bundle of goods in each country and then uses this price index to convert each country's income to a common currency.
B) uses the exchange rate to convert the income level of each country to a common currency.
C) uses the prime interest rate in each country to convert the income level of each country to a common currency.
D) calculates the ratio of imports relative to exports in each country and then uses this ratio to convert each country's income to a common currency.