PPP vs GDP measurement

Macroeconomic factors are important economic indicators, and GDP nominal and GDP PPP are two key indicators. Out of the two, GDP nominal is the widely used measure, and GDP PPP can be used for selected decision making. The key difference between GDP nominal and GDP PPP is that GDP nominal is the GDP unadjusted for the effects of inflation and is at current market prices whereas GDP PPP is the GDP converted to US dollars using purchasing power parity rates and divided by total population.


I used some terms and assumed common understanding. For those who did not understand, this is an explanation.