​What is the primary goal of the International Comparison Programme (ICP), led by the United Nations Statistics Division (UNSD)?

Correct option is B

The correct answer is (b) To calculate Purchasing Power Parities (PPPs) and price level indices

Explanation:

• The primary goal of the International Comparison Programme (ICP), led by the United Nations Statistics Division (UNSD), is to calculate Purchasing Power Parities (PPPs) and price level indices.
• These are used to compare the relative price levels of countries and the economic output across nations, allowing for a better understanding of the relative purchasing power of currencies.

Purchasing Power Parities (PPP):

PPP is a method of measuring the relative value of different currencies based on the cost of goods and services in different countries. It helps in comparing the economic performance of countries in real terms rather than nominal values.

Price Level Indices:

Price level indices measure the relative prices of a fixed basket of goods and services in different countries. It is used to adjust for differences in the cost of living across countries.

Information Booster:

International Comparison Program (ICP)

• The International Comparison Program (ICP) was founded in 1968 as a joint venture between the United Nations Statistical Division (UNSD) and the International Comparisons Unit at the University of Pennsylvania, with financial support from the Ford Foundation and the World Bank.
• Initial Goal: Initially a research project, the ICP aimed to create a regular program for global Purchasing Power Parity (PPP)-based comparisons of GDP.
• Focus on GDP Comparison: Initially intended to compare GDP from both expenditure and production sides of national accounts. However, comparisons have been limited to the expenditure side due to ease of implementation.
• Expenditure vs. Production: Expenditure-side comparisons are simpler as they focus on final expenditures, whereas production-side comparisons are more complex due to the need to account for both outputs and inputs, as well as double deflation.
• Completed Comparisons: Comparisons of final expenditure on GDP have been conducted for the years: 1970, 1973, 1975, 1980, 1985, 1993, 2005, 2011, 2017, and 2021.
• Country Participation: The number of participating countries varied by year: 10 (1970), 16 (1973), 34 (1975), 60 (1980), 64 (1985), 115 (1993), 146 (2005), 199 (2011), 178 (2017), and 176 (2021).
• Transformation in 1975: After the 1975 comparison, the ICP transitioned from a research project to a regular part of the UNSD work program, becoming regionalized.