Which of the following is not a measure of Wealth and Proverty?

Question

A) Purchasing Power Parity (PPP)

B) Human Development Index (HDI)

C) Gross Domestic Product (GDP)

D) None of the above

Answer 1

First you'll need to understand what Wealth and Poverty are.

As I'm not sure how your instructor has defined these words for your class I will assumed a generic definition.

Wealth = Money and product

Poverty = Amount of folks with not enough wealth to meet basic needs

Then we can dissect each of the options to dissect what they talk about.

a) The purchasing power parity looks at exchange rates to understand purchasing power of different currencies.

S=P1 / P2

​​where:S= Exchange rate of currency 1 to currency 2

P1​= Cost of good X in currency 1

P2​= Cost of good X in currency 2​

b) the HDI looks at how countries are doing at giving their citizens basic needs

c) GDP is the rate of production of goods and services (products) of a nation