Macroeconomics › Section F · The macroeconomic perspective › Topic F.4
Comparing GDP across countries
Is China's economy bigger than America's? Is India rich or poor? The answer depends on two adjustments: putting every country's GDP into one currency, and dividing by population. How you make the first adjustment can change the ranking.
In this topic
- Two problems with raw GDP
- Exchange rates
- Worked example: converting and dividing
- Why market rates can mislead
- Purchasing power parity
- Worked example: India two ways
- Total GDP versus GDP per capita
- Income groups
- What per-capita figures still hide
- Common mistakes to avoid
- Key takeaways
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