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 the PPP adjusted GDP statistics in those countries: lower, because consumption baskets include less expensive domestic help, resulting in lower prices higher, because oorsumption baskets include less expensive domestic help, resulting in lower prices. higher, because consumption baskats include less expensive domestic help, resulting in higher prices lower, because consumption baskets include less expensive domestic help, resulting in higher prices References eBook&Resources

Answer 1

It has been stated that the low-cost domestic help is available in poor countries.

Such low-cost domestic help services cannot be exported as immigration laws in most developed countries or rich countries will prevent such imports.

This result in non-equalization of prices of domestic help services among countries.

Due to this, consumption basket in poor countries include the low-cost domestic help resulting in lower prices which in turn increases the PPP-adjusted GDP of these countries.

So,

The correct answer is the option (2) [Higher, because consumption baskets includes less expensive domestic help, resulting in lower prices].