UPSC CSE Prelims
Question 88
Consider the following statements :
- Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries.
- In terms of PPP dollars, India is the sixth largest economy in the world.
Which of the statements given above is/are correct?
View correct answer and explanation
Correct answer: A
Correct Option: A
Explanation:
PPP rates compare the cost of equivalent bundles of goods and services to adjust purchasing power across countries. India was third, not sixth, in PPP GDP rankings around the 2019 exam.
Statement / Pair Analysis:
1 (Correct): PPP compares purchasing power using prices of a common goods-and-services basket.
2 (Incorrect): India ranked third worldwide by PPP-adjusted GDP then, not sixth.
Option-wise Analysis:
A (Correct): Includes all and only the true statements/pairs.
B (Incorrect): It includes false item 2 (India ranked third worldwide by PPP-adjusted GDP then, not sixth); omits true item 1 (PPP compares purchasing power using prices of a common goods-and-services basket).
C (Incorrect): It includes false item 2 (India ranked third worldwide by PPP-adjusted GDP then, not sixth).
D (Incorrect): It omits true item 1 (PPP compares purchasing power using prices of a common goods-and-services basket).
Review Note:
Economic rankings are period-sensitive; explanation refers to around 2019.