Question: This problem will give you practice in understanding how real GDP is determined. In 2000 in India (the figures in problem 10 above are for 2001), the price of copper was R 2,500/ton, while the value of retail sales per worker was R 20,200. What is the value of India's real GDP in 2001, assuming the 2000 prices are the base year prices for comparison? Remember, real GDP measures only changes in actual physical output, holding prices constant between years; if you need to, look back at Equation. (We could then convert this value to US dollars using the exchange rate as we did in problem and then divide by population to get real GDP per person.)
Problem: Now calculate total nominal GDP for each country valued not in its own currency, but in US dollars. If the average exchange rate in 2001 was 12.5 rupees = $1, India's total nominal GDP valued in US$ at the official exchange rates is equal to ___________? Can US and India GDP be compared now to say which country is "better off"? Explain.