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In constructing internationally comparably measures of per capita GDP, it is important to use purchasing power parity (PPP) exchange rates rather than market exchange rates
In constructing internationally comparably measures of per capita GDP, it is important to use purchasing power parity (PPP) exchange rates rather than market exchange rates because (A) the PPP exchange rate is equal to the relative GDP per capita of each country relative to the United States. (B) the PPP exchange rate is a more accurate measure of the true relative value of currencies. (C) the market exchange rate is determined by monetary policy. (D) market exchange rates are volatile and do not reect the relative values of all the goods and services that households consume in dierent countries
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