Question

In many poor countries even middle-class families may have full-time servants, a luxury reserved for only the very wealthiest households in rich countries like the United States. The existence of low-cost domestic help in poor countries makes PPP-adjusted GDP statistics in those countries:

O lower, because consumption baskets include less expensive domestic help, resulting in higher pricers.
O lower, because consumption baskets include less expensive domestic help, resulting in lower prices.
O higher, because consumption baskets include less expensive domestic help, resulting in lower prices.
O higher, because consumption baskets include less expensive domestic help, resulting in higher prices.

Answer 1

higher, because consumption baskets include less expensive domestic help, resulting in lower prices.

Step-by-step explanation:

Because the wages paid to house helps in poor countries are low resulting in higher PPP-adjusted GDP in these countries compared to rich countries that use GDp that is not adjusted.

The availability of cheap labor still exists in poor countries compared to rich countries because of the high cost of migration. So people providing cheap services cannot move.