On: Chinese economy overtakes the U.S.’s to become the...

[jvm]

Certainly Nominal GDP is a measure of the volume of transactions.

However, PPP-adjusted GDP is intended to be a measure of national income in real terms, or put another way, the amount of value actually produced. Which is how people often intuitively think of GDP.

[crdoconnor → jvm]

Um, $5 million to dig a ditch still means no value produced even if it was PPP adjusted.

[jvm → crdoconnor]

Nominal GDP: $5mil

PPP adjusted: $0

[crdoconnor → jvm]

PPP simply adjusts for local costs. It does not adjust for the value created during a transaction.