Country Current Local Currency (Nominal) Constant Local Currency (Real) Constant
ID: 1135855 • Letter: C
Question
Country
Current Local Currency
(Nominal)
Constant Local Currency
(Real)
Constant Dollars
Constant PPP Dollars
Constant PPP Dollars Per Capita
Country 1
2.5%
1.8%
1.8%
1.8%
.8%
Country 2
14.8%
6.2%
6.2%
6.2%
5.1%
Country 3
4.2%
2.3%
2.3%
2.3%
1.4%
Why are the growth rates for some of these five measures different, and why are some the same?
Country
Current Local Currency
(Nominal)
Constant Local Currency
(Real)
Constant Dollars
Constant PPP Dollars
Constant PPP Dollars Per Capita
Country 1
2.5%
1.8%
1.8%
1.8%
.8%
Country 2
14.8%
6.2%
6.2%
6.2%
5.1%
Country 3
4.2%
2.3%
2.3%
2.3%
1.4%
Explanation / Answer
Ans. The growth rates for some are different because of different countries having different economic systems as well as the rate of existing inflation in each country will be different. Also the size of the country as well as the policies of the central banks will also differ. One another point is that some growth rates are calculated at market prices and some are calculated at constant prices.