Question

Explain per capita income as a measure of economic growth

Answer 1

Per capita income is a measure of finding a weather a country is developed or not. Here, the average of the total income of every person is found, hence, giving the mean. This can be used to compare whether a country is generally developed or not.

But this is not a useful way of comparison. Say, there are 5 people in a country. And their incomes are shown:

Country A:     500         500        500       500     48000

Country B:   10000     10000      10000  10000  10000

Here both the countries have per capita income 10000. But country B is more developed as this income is uniform unlike A where one section of the society gets only 500 while the other section gets 48000.