Limitation of per capita income explain any 2
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4
Limitations of per capita income are :
1. It does not show the amount of income earned by a single individual in a year.
eg. 1 person earns rs 100000 in a year and other 200000 in a year then the average will show that both earns 150000 in a year, which is not exact value.
2. It greatly varies by extreme values.
eg. In a country where everyone is poor then the per capita income will also shows poor average but if it has very few rich people also then the per capita income will be on higher side even most of the people in that country are poor.
1. It does not show the amount of income earned by a single individual in a year.
eg. 1 person earns rs 100000 in a year and other 200000 in a year then the average will show that both earns 150000 in a year, which is not exact value.
2. It greatly varies by extreme values.
eg. In a country where everyone is poor then the per capita income will also shows poor average but if it has very few rich people also then the per capita income will be on higher side even most of the people in that country are poor.
Answered by
5
1. Per capita income is the average income of the country.It does not show how the income is distributed between the people. Therefore it hides disparities.
2. Per capita income takes into account only the economic aspect of life and ignores the social aspect of life.
2. Per capita income takes into account only the economic aspect of life and ignores the social aspect of life.
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