Question

Why is per capita income not an adequate indicator of the economic development of a country?

• A. Per capita income hides inequalities.
• B. Per capita income considers inequalities.
• C. Per capita income considers only the income earned by rich people.
• D. Per capita income can only apply to developing countries.

Answer 1

The correct option is A Per capita income hides inequalities.

Per capita income refers to money or income earned per person in a region or state. However, per capita income can sometimes be misleading because wealth is unequally distributed. Thus, per capita income may not reflect the actual living conditions of the people.