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GDP question the market and PPP exchange rates between the Chinese renminbi and the US dollar are about 6.5 and 4.1 renminbi per US dollar,

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GDP question

the market and PPP exchange rates between the Chinese renminbi and the US dollar are about 6.5 and 4.1 renminbi per US dollar, respectively. Using the charts below, show that China's real GDP is larger than the United States' real GDP if we use PPP exchange rates, but not if we use market exchange rates.

Figure 1: United States' real GDP (1960-2021). Source: Federal Reserve Economic Data

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FRED. ~ - Current Price Gross Domestic Product in China 28,000,000,000,000 24,000,000,000,000 20,000,000,000,000 16,000,000,000,000 Chinese Yuans 12,000,000,000,000 8,000,000,000,000 4,000,000,000,000 0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 11 1995 2000 2005 Source: Organization for Economic Co-operation and Development fred.stlouisfed.orgFRED ~ - Current Price Gross Domestic Product in United States 6,000,000,000,000 5,000,000,000,000 4,000,000,000,000 United States Dollars 3,000,000,000,000 2,000,000,000,000 1,000,000,000,000 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 1970 1980 1090 U.S. recessions are shaded; the most recent end date is undecided. Source: Organization for Economic Co-operation and Development fred.stlouisfed.org

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