Multiple choice

Directions: Read the passage/argument and answer the question that follows it.

International organisations, such as the World Bank and the IMF, have been exaggerating the size of the Chinese economy in the past. If GDP of China is converted into dollars using market exchange rates, it amounted to $2.7 trillion last year, only one-fifth of America's $13.2 trillion, and the fourth-largest in the world. But a dollar buys a lot more in China than in America because prices of many non-traded goods and services tend to be much lower in poor economies.

Which of the following would best complete the above paragraph?

  1. Therefore, an average Chinese is richer than an average American.

  2. Thus, what finally matters is the number of dollars in your hands.

  3. Therefore, we can reasonably expect that converting a poor country's GDP into dollars at market exchange rates understates the size of its economy.

  4. Hence, all such comparisons need to account for those non-traded goods and services.

  5. Therefore, America is not as big as is thought to be.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

There is nothing given about the average income of a Chinese vs. an American. Thus, option (1) is not a suitable closing line. Option (2) goes against the logic presented because what matters is what you can buy with a dollar, not its number. Hence, option (2) is also wrong. It is difficult to comment on the truth of option (5) because the author has not written anything about how much a dollar is really worth in terms of comparison. Option (3), the correct option, is very much in line with the overall logic of the question and summarises the entire point nicely.

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