Question

What do you mean by per capita income of a country? How can it be used to compare two countries?

Answer 1

It is also known as Average income of a population residing in a particular area or country. It is the income per person. To calculate it, we add up all sources of income in an economy such as GDP(Gross domestic product) or Gross national income and then divide it by the total population of that economy.

On a whole we can estimate the state of an economy and standard of living of a particular country through per capita income. Thus by calculating it for different countries,
we can have basic idea of these factors relating to that economy.