Consider the following statements:
1. Purchasing Power Parity exchange rates are calculated by comparing the prices of an identical basket of goods and services across different countries.
2. Measured in Purchasing Power Parity terms, India was the sixth largest economy in the world during this period.
Which of the statements given above is/are correct?

Question

Accepted Answer

A. 1 only. Purchasing Power Parity exchange rates are indeed calculated by comparing the prices of an identical basket of goods and services across different countries, which correctly makes statement 1 true. During this period, however, India ranked as the third largest economy in the world when measured in PPP terms, not the sixth, so statement 2 overstates how far down the ranking India actually was. Since only statement 1 is correct, option A is correct.

Answer

A. 1 only

Answer

B. 2 only

Answer

C. Both 1 and 2

Answer

D. Neither 1 nor 2