This has been recently reported that China has surpassed Japan, France, and Germany to become the worlds second largest economy and could very soon overtake the USA as the world first economy. The goal of this section is to go behind headlines by comparing GDPs across these countries.

1. [5 points] Graph the GDPs of the USA, China, Japan, France and Germany (note: use GDP (constant 2010 US$)). Comment.

2. [5 points] Now, graph the GDPs of the USA and China ONLY (both on the same graph). (note: use GDP (constant 2010 US$)). Comment.

3. [5 points] GDP, especially in developing countries can be underestimated because the market value of goods and services is generally less as compare their market value in developed economies. To correct for this, purchasing power parity (PPP) prices are used instead.

• Graph the GDPs of the USA and China (note: use GDP, PPP (constant 2017 international $)). Comment and compare with b.)

4. [5 points] Is China catching up with the US? How large is the USA economy relative to the Chinese economy? (Hint: use GDP (constant 2010 US$) and graph the ratios of the US GDP relative the China GPD across the years.). Be specific in your comments!