§ Mr. Knoxasked the Chancellor of the Exchequer, from information available from international sources, what was the gross domestic product per head at factor cost in the United States of America for the most recent year for which information is available; and how this compares with the figure for the United Kingdom.
§ Mr. Denzil DaviesThe latest year for which information is available is 1976. Details are as follows:
GROSS DOMESTIC PRODUCT AT FACTOR COST PER HEAD OF TOTAL POPULATION United States dollars Based on market exchange rates Based on purchasing power parities United States … 7,240 7,240 United Kingdom … 3,508 4,262 Source: Derived from National Accounts of OECD countries 1976 (Volume 1).
For comparison purposes, the use of market exchange rates to convert to a common unit of measurement can be very misleading since these rates do not reflect the relative internal purchasing power of currencies. A more satisfactory method is to use purchasing power parities; these have been obtained by extrapolating to 1976 the comparisons made by the United Nations of relative prices of goods and services in 1970.