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For comparing countries, their income is considered to be one of the most important attributes. Countries with higher income are more developed than others with less income. This is based on the understanding that more income means more of all things that human beings need. Whatever people like, and should have, they will be able to get with greater income. So, greater income itself is considered to be one important goal. The income of the country is the income of all the residents of the country. This give us the total income of the country. However, for comparison between countries, total income is not such a useful measure. Since, countries have different populations, comparing total income will not tell us what an average person is likely to earn. Are people in one country better off than others in a different country? Hence, we compare the average income which is the total income of the country divided by its total population. The average income is also called per capita income. In World Development Reports, brought out by the World Bank, this criterion is used in classifying countries. Countries with per capita income of US$ 12,056 per annum and above in 2017, are called rich countries and those with per capita income of US$ 955 or less are called low-income countries. India comes in the category of low middleincome countries because its per capita income in 2017 was just US$ 1820 per annum. The rich countries, excluding countries of Middle East and certain other small countries, are generally called developed countries. Human Development Report published by UNDP compares countries based on the educational levels of the people, their health status and per capita income.
Question (i)
Per capita income is also called as:
(a) Average income
(b) Total income
(c) Marginal income
(d) None of the above
Answer:
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Per capita income is the mean income of the people in an economic unit such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate and dividing it by the total population. Therefore, it is also called average income.
So, the correct answer is (a).
Question (ii)
Per capita income is also called as:
(a) Average income
(b) Total income
(c) Marginal income
(d) None of the above
Answer:
The main criteria used by the World Bank in classifying different countries is based on average or the per capita income of the country.
So, the correct answer is (a).
Question (iii)
According to the World Development Report 2006, countries with per capital income of ` 4,53,000 per annum and above in 2004 are called:
(a) Rich countries
(b) Low income countries
(c) Middle income countries
(d) None of the above.
Answer:
Countries with a per capita income of Rs. 4, 53,000 per annum and above in 2004, are called high-income or rich countries.
Rich countries are generally referred to as developed countries , with the exception of Middle Eastern countries and a few other small countries.
So, the correct answer is (a).
Question (iv)
The compares the development of the countries on the basis of literacy rate, gross enrolment ratio and health status of their people.
(a) UNDP
(b) World Bank
(c) Both (a) and (b)
(d) None of the above
Answer:
Human Development Report published by UNDP compares countries based on literacy rate, gross enrolment ratio , and their health status of their people.
So, the correct answer is (a).
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