Give an advantage and a disadvantage of using real GDP per capita (PPP) as a measure of welfare. Explain if the disadvantage you identified means the GDP in PPP over or underestimates welfare. (5 points)
2. In 2021, Indiaās GDP per capita was USD 2256, and 7248 in PPP dollars. For the same year, Brazilās GDP per capita was USD 7507 and 16031 in PPP dollars. Which country has the higher price index? According to the Balassa Samuelson hypothesis, which country has the higher relative productivity of tradable? (5 points)
3. In the theoretical Malthusian model, the law of motion of population is given by Lt+1 = ntLt. However, we use the equation Lt+1 = γ Ļ (AX) α (Lt) 1āα to solve the model. Explain how the two equations relate, and why we canāt use the first one to solve for the evolution of population directly. (5 points)