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Consider the following statements

1. Purchasing Power Parity (PPP( exchange rates are calculated by comparing the prima of the same basket of goods and services in different countries. 
2. In terms of PPP dollars, India is the sixth largest economy in the world. 
Which of the statements given above is/are correct? 
(a) I only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 

Asked On2019-07-10 10:52:15 by:Gaganpreet-Gandhi

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The ‘Purchasing Power Parity’ is the exchange rate that allows one to buy the same amount of goods and services in every country. It is a theoretical rate as it is used by no country and is only used by the Government agencies to compare the output of countries that use different exchange rates. It basically describes what would a thing cost, if it was sold in the US Dollars. The World Bank calculates the PPP for each country, depicting a map that shows the PPP ratio compared to the United States. This shows a comparison between the economic productivity and standards of living between all the countries. On the PPP basis, China is the world's largest economy in 2018, followed by United States at 2nd and India at 3rd position.
Correct option A

Answerd on:2022-03-01 Answerd By:Sheethal-

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