Question

how average income hides disparities in calculating national development

Answer 1

hi friend,

average income hides the disparities among people.
consider an example if 1 country is having people who earn the same income... let the average income of that country be 5000 rupees...
if another country has 5 people but 4 of them have very less income and the 5th one is very rich... the average would be the same i.e 5000 rupees..
so.. both the cases become same when we do comparison on the basis of income...



hope this helps u to understand..❤️

Answer 2

It does not give us how income is distributed among people . A country may have an equitable distribution. People may be neither rich nor poor but in another country with the same average income one person may be extremely rich while others may be very poor. So the method of average income does not give the correct picture of a country. Hence this system hides disparities among people .

hope it will help you