Question

GNI/capita, a crude estimate of purchasing power, must be further refined by

A. an examination of the amount of income tax paid.
B. a census to determine the total population.
C. incorporating data on how the national income is actually distributed.
D. determining the amount of discretionary income.
E. calculating the amount of tax avoidance by individuals and corporations.

Answer 1

GNI per capita must be refined by incorporating data on income distribution to accurately reflect a country's economic well-being and account for income inequality.

Step-by-step explanation:

Gross National Income (GNI) per capita is often used as a crude estimate of purchasing power and to compare the standards of living between nations. However, to gain a more accurate picture of economic well-being, GNI per capita must be refined by incorporating data on how national income is distributed. This tackles the issue of income inequality which is not reflected in GNI per capita alone. The statistic most commonly used to compare standards of living, such as GDP per capita, has limitations and must consider factors like purchasing power parity (PPP) to account for differences in the prices of goods and services across different countries. The World Bank uses methods like PPP to convert average incomes into comparable units, known as 'international dollars,' allowing more accurate comparisons of standards of living globally.