Principles of Macroeconomics / Unit 16 MAC 1502 short lesson, about 20 seconds
Measuring Income Across Countries
Captions available
The idea
Comparing incomes across countries needs a converter. Market exchange rates swing for financial reasons, so a country's measured income moves when nothing real has changed. Purchasing power parity is the better converter.
In practice
Gross national income per capita is the World Bank's measure, alongside GDP per capita.
Where people slip
Unit thirteen built this distinction; here it decides which countries look poor.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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