Question

Q12. What is the main criterion used by the World Bank in classifying different countries as rich and poor? What are the limitations of this criterion?

Answer 1

per capita income is the criteria and limitations are that we are not get single person income with per capita income of country

Answer 2

The World Bank measures income using the country’s per capita Gross National Income (GNI). This is measured in US Dollars, converted from the local currency of the country being measured, by the World Bank Atlas method.

One limitation of GNI is that it is an average, including income from citizens of the country, who work abroad.

Countries are divided into four income groups – low income group, lower middle-income group, upper middle-income group and the high-income group.