Question

what is average income ? what is its importan ? mention its limitations related to development​

Answer 1

Answer:

Since it is an average measure, it can conceal significant inequality in the distribution of income in a country. Average income may be high because there are a few very rich people and a large number of poor people. In that case, high average income will not indicate high level of development.

Answer 2

Per capita income or average income measures the average income earned per person in a given area in a specified year. It is calculated by dividing the area's total income by its total population. Per capita income is national income divided by population size.

Average income is an important criterion for development because: Average income tells us about the total income of the country divided by total population of the country. Average income ,also known as per capita income ,tells us about the actual earning of an individual.

Limitations related to development :-

1) It covers only economic expect of life ignoring social aspects such as health, education, etc.

2) It divides the country between rich countries and poor countries.

3) It doesn't provide distribution of income between people.