Choose whether the statement is true/false.

Average income is the best way to compare countries.

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True

False

answer is A.

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Detailed Solution

The above statement is true.
Averages are not the best way to compare countries or states because averages hide the reality. Averages do not show the disparities. They do not show the distribution of income among different people. For example, there are two countries, A and B, with four citizens each. In Country A, all of the residents earn 8000 dollars per annum, which means the average income of Country A is 8000 dollars per annum, and in Country B, the residents earn 500, 1000, 1500, and 29000 dollars. Country B's average annual income is also 6000. But, in country B, the average income is not distributed equitably among the residents. One citizen is earning too much, and the other three are earning too little. Thus, averages do not show the disparity.

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