What is the difference between GDP (PPP) and GDP (nominal)?

Question

India's GDP ppp about 2.9 Trillion

but exchage rate or nominail is 1.09 Trillion

Answer 1

Purchasing Power Parity GDP is adjusted for the purchasing power of that currency.

Answer 2

Nominal is converted to dollars using the  official exchange rate used for trade.

PPP is converted to dollars by using the ratio of the price the  basket of goods consumed by the typical person in India  and the price of those same goods in the US.

Note: If the basket of goods  were those  consumed by a typical person in the US the conversion would give a different number  closer to the Nominal value.

Answer 3

assk a nerd