Why do economists adjust incomes for what money buys locally?

• To compare what incomes can actually buy
• To make exchange rates move less each day
• To punish countries with high prices

What does income per person measure?

• The pay of a typical worker
• The average output for each person
• The total size of the economy

Life expectancy and schooling sit next to income because money alone misses health and opportunity.

A report calls a country's average income middling, yet visitors see luxury towers beside poor villages. What best explains the puzzle?

• The average blends a rich capital with poor regions
• The poverty line was drawn far too low
• Catch-up growth has already finished there

Two countries make the same total output, but country A has twice the people of country B. What follows?

• Both rank the same on living standards
• A must be poorer in every possible way
• A has about half the income per person of B

A charity counts households that cannot afford enough food and shelter. Which cutoff is it using?

• An exchange rate
• An absolute poverty line
• A relative poverty line

Two poor countries open to trade. One calms conflict and builds schools; the other stays at war. What do you expect?

• Both catch up at exactly the same speed
• Trade alone guarantees both will catch up
• The peaceful one is likelier to narrow the gap

A student says GDP growth must mean cleaner rivers and more free time. What is the mistake?

• GDP already counts unpaid care work
• GDP falls whenever leisure time rises
• GDP counts market output, not clean air or leisure