The correct answer is option 1, i.e 1 only. PPP is an economic theory that compares currencies of different countries through a similar "basket of goods and services". The PPP between two countries measures the amount of one country's currency required to purchase a basket of goods and services in the country that as compared to the amount of other country's currency in order to purchase a similar basket of goods and services in the other country. Hence statement 1 is correct. In terms of PPP dollars, China is the world’s largest economy in 2018, followed by the United States and India at second and third positions respectively. Hence statement 2 is not correct.