HW1-Answer.pdf - Homework#1-Answer How to measure...

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1 Homework #1-Answer How to measure Development (a)McDonald’s operates in various countries. It has been found that the relative price of a Big Mac is a better guide to the overall cost of living than estimates using the exchange rate. Why do you think this might be the case?
(b)Think of various indicators of development that you would like to see in your concept of “economic development.” Think about why per capita income, as measured, may or may not be a good proxy for these indicators.

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