Question

See Hint Haiti is a very poor country. Singapore is much smaller geographically and has far fewer people, but it is roughly 70 times richer in terms of per capita GDP. Supposing the following statements are true, which one might explain why Haiti is a little closer to Singapore in terms of standard of living than the official statistics suggest?

Choose one:
A .Health standards in Singapore exceed those in Haiti.
B. Singapore is much more livable in terms of pollution than Haiti.
C. There is more underground market activity in Singapore than in Haiti.
D. Haiti has more nonmarket production than Singapore.

Answer 1

Haiti may be closer to Singapore in terms of standard of living than GDP suggests due to nonmarket production not reflected in economic statistics, as option D demonstrates.

Step-by-step explanation:

An explanation for why Haiti might be closer to Singapore in terms of standard of living than official statistics suggest could come from considering the level of nonmarket production. Option D states that Haiti has more nonmarket production than Singapore. This means that there is a possibility that Haiti's actual living standards are somewhat higher than what is reflected in its per capita GDP because nonmarket production, such as home-grown food and self-built housing, is not counted in official economic statistics. Although Singapore is far wealthier with higher health standards and less pollution, the presence of nonmarket economic activity in Haiti could mean that Haitians have access to certain goods and services that are not captured by traditional economic measurements.