Difference between GDP (PPP) & GDP (nomial)?

Question

what is the difference between GDP (PPP) & GDP (nomial)

Answer 1

1. Measure GDP in own currency

2. Convert that to $ terms by exchange rate ...that's nominal GDP.

3. compare price levels btw USA and own country ( this data is available with their finance min. and IMF)

4. Multiply GDP nominal by this comparison called PPP., to get GDP(PPP)

Answer 2

PPP & THE BIG MAC INDEX Purchasing Power Parity (PPP) is the purchasing power of a currency measured in terms of the purchasing power of another currency. The Economist, an internationally renowned news publication, frequently uses the Big Mac Index (yes, you heard correctly), which tracks the price of Big Macs around the world in order to see how much your dollar can buy. It is, perhaps, amusing to see that statistically, the BMI is roughly accurate. This is because of the mass consumption of McDonald's products. For example, when McDonald's decreased the price of the Big Macs world-wide, there was a massive decrease in the world price of beef. CHINA'S PPP & STATISTICAL DISTORTION China's GDP per capita (PPP) may be much higher due to statistical distortions, such as the average not representing the distribution of income. This would imply that there are many 'super-rich' citizens in China, which drags up the average GDP (PPP) for the nation. Japan may simply have a lower Ginni Coefficient, which is the coefficient expressed in the Lorenz Curve, measuring the distribution of income in a nation. China's Gini Index is currently 44.7, whereas Japan's is 24.9, indicating much higher income inequality in China than Japan.

Answer 3

GDP (PPP)=GDP (nominal)/ PPP.

PPP is index of purchasing power parity. It is used for international comparison,by assuming that price of the same good will be equal in different countries.