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Scenario: the Price of a Standard Basket of Goods in Country

Question 158

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Scenario: The price of a standard basket of goods in Country A is 10 pesos. The price of the same basket of goods in country B is 25 francs and $5 in the United States. Country A has an income per capita of 60,000 pesos, and country B has an income per capita of 100,000 francs. Assume full employment in both countries.
-Refer to the scenario above.Which of the following statements has to be true if we plot the relationship between income per capita (x-axis) and the Human Development Index (y-axis) ?


A) Country A lies above and to the right of Country B
B) Country A lies to the right of Country B
C) Country A lies below and to the left of Country B
D) Country A lies above country B

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