economicsChoose the given statement as true/false:Average income cannot be considered the only statistic for comparing countries.

Choose the given statement as true/false:


Average income cannot be considered the only statistic for comparing countries.


  1. A
    True
  2. B
    False 

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    Solution:

    The above statement is true.
    Although an important criterion for development and considered one of the most critical attributes for comparing countries, average income has limitations. Average income does not tell us anything about income distribution between the people in a country. A country with an average income evenly distributed among its citizens is much better off than a country where people earn in extremes, either extremely rich or extremely poor, i.e., with unequal income distribution. Per-capita income also cannot be used as the sole criteria for comparison because it does not consider various facilities and services that influence the quality of life, such as access to proper healthcare, good quality education, and equal treatment of people in society, etc. Average income is also affected by the population size, i.e., the more population a country has, the lesser its average income will be.
     
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