Previous Year Question
Which one of the following countries is the third largest economy of the world?
Japan
Malaysia
India
China
Correct Answer: A
Detailed Solution
In 2011, Japan was the world's third-largest economy in terms of Nominal GDP. At that time, the United States ranked first, while China ranked second. In 2010, China overtook Japan to become the world's second-largest economy. Consequently, Japan moved to third place.
Nominal Gross Domestic Product (GDP) represents the total monetary value of final goods and services produced within a country during a specified period, measured at current market prices. For international comparisons, it is generally expressed in US dollars using prevailing Exchange Rates. In 2011, Japan's Nominal GDP was approximately US$ 6.23 Trillion, compared with approximately US$ 7.67 Trillion for China.
The ranking of economies may differ when measured using Purchasing Power Parity (PPP). PPP accounts for differences in the prices of goods and services across countries. According to the World Bank's International Comparison Program (ICP) 2011, the United States ranked first, China second, and India third in PPP-Based GDP. However, the results of this study were published on 30 April 2014.