What is the main criterion used by the World Bank in classifying different countries? What are the limitations of this criterion, if any
Answers
Answer: Income
Explanation: The World Development Report, 2012, brought out by the World Bank has given the following criterion in classifying countries-
Rich or High income countries- Countries with the per capita income of US $1216 per annum and above in 2012, are called rich countries.
Poor or Low income countries- The countries with the per capita income of US $1035 or less, are called low income countries.
India comes in the category of low middle income countries because its per capita income in 2012 was just US $1530 per annum. The rich countries, excluding countries of Middle east and other small countries, are generally called the developed countries.
Limitations-
1. It covers only the economic aspect ignoring peace, health, environment, education, longevity ,etc.
2.This method does not give information regarding the distribution of income.
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Answer:
The main criterion used by the World Bank in classifying different countries is the per capita income or average income of a person in a country.
Limitations of this criterion:
It does not tell us about how this average income is distributed among the people in the individual countries. Two countries with the same per capita income might be very different with regard to income distribution. One might have equitable distribution of income while the other might have great disparities between the rich and the poor.