Question 14 Marks
Read the following text carefully and answer the questions that follow:
The income of countries is considered to be one of the most important attributes for making comparisons between countries. Intuitively, the income of the country is the income of all the residents of the country. This gives 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. Hence, we compare the average income which is the total income of the country divided by its total population. In World Development Reports, brought out by the World Bank, this criterion is used in classifying countries. Countries with per capita income of US dollar 12,056 per annum and above in 2017, are called rich countries and those with per capita income of US dollar 955 or less are called low-income countries. India comes in the category of low-middle-income countries. The rich countries, excluding countries of the Middle East and certain other small countries, are generally called developed countries.
I. What is the other name of average income? (1)
II. In which category is India classified based on its average income? Explain. (1)
III. Is the average income an important criterion for development? Why? (2)
The income of countries is considered to be one of the most important attributes for making comparisons between countries. Intuitively, the income of the country is the income of all the residents of the country. This gives 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. Hence, we compare the average income which is the total income of the country divided by its total population. In World Development Reports, brought out by the World Bank, this criterion is used in classifying countries. Countries with per capita income of US dollar 12,056 per annum and above in 2017, are called rich countries and those with per capita income of US dollar 955 or less are called low-income countries. India comes in the category of low-middle-income countries. The rich countries, excluding countries of the Middle East and certain other small countries, are generally called developed countries.
I. What is the other name of average income? (1)
II. In which category is India classified based on its average income? Explain. (1)
III. Is the average income an important criterion for development? Why? (2)
Answer
View full question & answer→i. The average income is also called per capita income.
ii. India comes in the category of low-middle-income countries because its per capita income in 2017 was just US dollar 1820 per annum.
iii. Yes, the average income is important for development. Income can enable people to at least make provisions for the basic necessities of life. If the average income of a
country is on the higher side, its chances of faring better on the development index are better. Hence, average income can be an important criterion for development.
ii. India comes in the category of low-middle-income countries because its per capita income in 2017 was just US dollar 1820 per annum.
iii. Yes, the average income is important for development. Income can enable people to at least make provisions for the basic necessities of life. If the average income of a
country is on the higher side, its chances of faring better on the development index are better. Hence, average income can be an important criterion for development.