[ 481 ] Economics GED ® TEST SOCIAL STUDIES FLASH REVIEW _____________ • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Use the table and text to answer the following three questions. Income Per Citizen, 2006 Per Capita Income (US Dollars) PPP Income (US Dollars) Luxembourg 80,288 69,800 Norway 64,193 42,364 Iceland 52,764 35,115 Switzerland 50,532 32,571 Ireland 48,604 40,610 Denmark 47,984 34,740 Qatar 43,110 29,000 United States 42,000 41,399 Sweden 39,694 32,200 Netherlands 38,618 32,100 Economists use several measures to calculate the income of the average citizen of each country. Data documenting each citizen’s personal income is rarely available, unfortunately, so economists must estimate personal income by dividing gross domestic product (GDP)—the value of all the goods and services produced in a country—by the number of citizens. This figure gives an inaccurate picture of how citizens live, however, because it fails to take into account the cost of goods and services in a country. A second measure, called purchasing power parity (PPP), adjusts for the domestic cost of goods to provide a more accurate picture of what each citizen’s money will buy him or her. For the sake of comparison, both measures are calculated in U.S. dollars. The table shows the figures for ten of the world’s wealthiest nations in 2006. Which of the following would best explain the difference between per capita income and PPP income in Norway? a. Consumer goods are extremely costly in Norway. b. Many consumer goods are available in Norway. c. Norway must import most of its consumer goods from Asia. d. Services are relatively cheap in Norway.