What do you mean by per capita income of a country? How can it be used to compare two countries?
Ans. The per capita income of a country is the total National Income (GDP) divided by the total
- population. It is used to compare development of countries by the World Bank.
The country with a higher per capita income implies that its people are earning more on an average and this is considered the indicator of higher development. However, this hides tfie fact that there may be wide disparities in the earnings of people, which implies inadequate social development.