You Are a Staff Economist for Your Local Bank and the Bank

Essay

You are a staff economist for your local bank and the bank manager claims that in 2012 the Chinese economy was bigger than in the United States. To prove him wrong you decide to put your economics training to work for you and decide to show him China's GDP in U.S. dollars, and to show him how smart you are, you also decide to calculate PPP GDP in China and compare that to the United States as well. You have the following data: In 2012, China's nominal GDP was CY 51.932 trillion (CY = Chinese yuan); the yuan-dollar exchange rate was CY 6.31/$1; nominal GDP in the United States was $15.685 trillion; the price level in the United States was 1.00 and the price level in China was 0.60. How big is China's economy?