Calculate the PPP-adjusted GDP for each of the four countries using the informat

Question

Calculate the PPP-adjusted GDP for each of the four countries using the information found in the table below. Instructions: Round your answers to the nearest dollar. Country GDP Ona Rye Price level PPp-adjusted GDP 10,000 12,700 14,100 3,400 27 -10 20 Avon References eBook & Resources Section: Accounting for Price Differences Across Places Numeric Response Learning Objective: 08-06 Use a price index to calculate PPP- adjusted variables and compare the cost of living across different places. Section: PPP-Adjustment

Explanation / Answer

PPP-adjusted GDP = GDPnomimal × [1/(100% + purchasing power index)].

Country

GDP
($)

Price level
(%)

PPP-adjusted GDP

Ona

10000

6

$10000 × [1/(100% + 6%)] = $10000 × 1/1.06 = $9433.96

Rye

12700

-27

$12700 × [1/(100% – -27%)] = $12700 × 1/0.73 = $17397

Zolfo

14100

-10

$14100 × [1/(100% – -10%)] = $14100 × 1/0.9 = $15666.67

Avon

23400

20

$23400 × [1/(100% + 20%)] = $23400 × 1/1.20 = $19500

PLEASE RATE THE ANSWER AS THUMBS UP. THANKS A LOT.

Country

GDP
($)

Price level
(%)

PPP-adjusted GDP

Ona

10000

6

$10000 × [1/(100% + 6%)] = $10000 × 1/1.06 = $9433.96

Rye

12700

-27

$12700 × [1/(100% – -27%)] = $12700 × 1/0.73 = $17397

Zolfo

14100

-10

$14100 × [1/(100% – -10%)] = $14100 × 1/0.9 = $15666.67

Avon

23400

20

$23400 × [1/(100% + 20%)] = $23400 × 1/1.20 = $19500

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