Consider the following statements:1.Purchasing Power Parity (PPP) exchange rates are calculated by comparing the prices of the same basket of goods and services in different countries

1. A

   1 only

   (a) 1 only. PPP exchange rates compare the price of a common basket of goods and services across countries (ICP). Statement 2, which ranked India as the sixth-largest economy in PPP dollars, was false: India was already among the top three in PPP GDP. That is the official key.

2. B

   2 only

   (b) 2 only. The sixth-largest PPP ranking was wrong at the time of the paper. Not the key.

3. C

   Both 1 and 2

   (c) Both 1 and 2. Statement 2 fails. Not the key.

4. D

   Neither 1 nor 2

   (d) Neither 1 nor 2. Statement 1 is true, so neither is wrong.

Summary. Official key is (a). PPP is a basket-price conversion, not a market-exchange-rate ranking. In PPP terms India was already the third-largest economy (after China and the United States), not the sixth. Honour (a).