What is the ratio of real gdp in india to real gdp in the us

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Reference no: EM13222325

Indian GDP in 2000 was 20.9 trillion rupees, while U.S. GDP was $9.8 trillion. The exchange rate in 2000 was 44.9 rupees per dollar. India turns out to have lower prices than the U.S. (this is true more generally foor poor countires): the price level in India(converted to dollars) divided by the price level in the U.S. was 0.171 in 2000.

a) What is the ratio of Indian GDP to U.S. GDP if we don't take into account the differences in relative prices and simply use the exchange rate to make the conversion?

b) What is the ratio of real GDP in India to Real GDP in the U.S. in common prices?

c) Why are these two numbers different?

Reference no: EM13222325

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