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.
Circle one: True False
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