Question

Country X's per capita income is low. It appoints an economist to overcome this problem. However, the economist needs to understand the reasons for such low capita income before devising an economic plan.

Help the economist understand the situation by stating the reasons for a low per capita income.

• A. There are more employees than entrepreneurs.
• B. There is a lack of employment opportunities.
• C. There is a high birth rate and a low death rate.
• D. There is a lack of infrastructural facilities like education and training.

Answer 1

Answer: (B), (C), (D)

There is a lack of infrastructural facilities like education and training.

Per capita income is calculated by dividing the total income by the population. A low per capita income can be due to low total income or due to overpopulation. When there is a lack of employment opportunities, the income of people reduces. Also, due to the lack of access to infrastructure facilities, all people are not employable. This reduces the total income. Further, there is population growth due to high birth rate and low death rate. All these factors result in low per capita income.