in many poor countries In many poor countries, even middie-class families may ha

Question

in many poor countries In many poor countries, even middie-class families may have full-4ime servants, a luxury reserved for only the very wealthiest households in rich countries like the United States. The O higher, because consumption baskets include less expensive domestic help, resulting in higher prices. O higher, because consumption baskets include less expensive domessic help, resulting in ower prices O lower, because consumption baskets include less expensive domestic help, resulting in higher prices C lower, because oonsumption baskets include less expensive domestic help, resulting in lower prices.

Explanation / Answer

Correct option: (b)

Reason: The PPP adjusted GDP will become higher because of the inclusion of relatively inexpensive domestic help, thereby increasing consumption and thus increasing PPP due to lower prices.

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