Need Help Please To Answer These True or False Worded Questions

Question

You are watching a news report with a friend. The news reader points out that a certain troubled pacific nation generates a RGDP per capita of only $500 (AUS) per year. Since your friend knows that Australia’s RGDP (per capita) is around $50 000 (AUS), she suggests that a person in Australia is materially 100 times better off in Australia than in the Pacific Island nation. Is your friend’s statement accurate? (true or false plus explanation)

If a South Korean car costs 12,000,000 won (South Korean currency), if a similar car in the Australia costs $40,000 AUS, and if $1 AUS buys 1000 won then, in this case, purchasing power parity holds. (true or false plus explanation)

Every International transaction represents a two-way exchange of value ensuring that NFI will always be equal to CAB. (true or false plus explanation)

Answer 1

Hello!

For the first question, I would say false, because GDP is not an accurate indicator of the quality of life or income for an average person in a country.

For the second question, I would say false because the car in Australia is $40,000 which is equal to $40,000,000 won, so Purchasing Power Parity does not hold.

For the third question, I would say true because NFI= CAB in any international exchange of equal value.