Question

Define average income. Write the demerit of using average income for comparing countries.

Answer 1

Dear Student,

a. Average income which is the total income divided by the population. It serves as an important tool of comparing different nations and classifying them as rich countries or low income countries.
b. This criteria however only takes into account the quantitative aspect and does not talk of how the income is distributed among the different sections of the society.
c. It also does not indicate the disparities among the people of the country.
d. Its disadvantage is that it ignores qualitative factors for comparing development like health, education etc.

Regards