Economics · Development Economics
Consider the following statements regarding development economics concepts. Which statement is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Terms of trade refers to the ratio of a country's average export price index to its average import price index.
- 2Absolute poverty is the state of being unable to meet essential survival needs like food, clothing, shelter, and basic healthcare.
- 3Purchasing Power Parity (PPP) uses a specific set of international prices for goods and services to compare living standards accurately.
- 4Purchasing Power Parity (PPP) measures total national income without accounting for differences in cost of living across countries.✓
Correct answer
Purchasing Power Parity (PPP) measures total national income without accounting for differences in cost of living across countries.
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