Total income is not a useful measure for comparison between countries. What is the defect of average as a measure of income?

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It hides the income of an individual

It does not tell the true dispersion of income between rich and poor.

It hides the true picture of economic distribution

All of the above

answer is D.

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Detailed Solution

The defect of the average as a measure of income is It hides an individual's payment, It does not tell the proper dispersion of income between rich and poor, and It hides the accurate picture of economic distribution. Since the total revenue while computing the production can never be considered an indicator to tell the true economic wealth of a nation and its people. It is only used to make a comparative analysis of the country's position. Its limitations hide disparities and don't give us an accurate economic distribution picture. It can not become the true indicator of comparing countries based on average income. Two countries may have the same average income, but in one country, almost every family may enjoy more or less the same kind of income, whereas in another, some may be very rich, and others might be poor. Thus, it hides the income distribution between the rich and the poor.

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