Mention if the given statement is true or false:

Per capita income is enough to reveal the development levels of countries.

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True

False

answer is B.

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Detailed Solution

The above statement is false.
The size of per capita income gives an idea of the earnings of an average individual in the country. It does not clearly state the income inequalities of a nation. Countries with a high total income and less population tend to show a higher per capita income than countries with a higher total income and high population. This is one of the limitations of using per capita income as an economic indicator. The purchasing power parity of a currency is also not captured by per capita income. In per capita income, social issues like gender and wealth inequality are also ignored.
The correct statement is, “Per capita is one of the factors used to determine the development levels of countries.”

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