Question

What is the main criterion used by the world bank in classifying different countries?write the limitations of this criterion?

Answer 1

The main criteria used by World Bank is the average income of the country.
Its limitations are :
1.it cannot evaluate and individuals exact income in the country and according to the findings average income is mistaken for every individual.
2. It fails to evaluate the different conditions of the country I.e, health condition, poverty condition etc.

Answer 2

Per Capita Income is the main criterion used by the World Bank in classifying different countries. The limitation of this criterion are:

Per capita income is useful for comparison but it doesn't show the distribution of income.

It also ignores other factors such as infant mortality rate, literacy level, healthcare, etc.

Per capita income does not give the true picture as there is a huge population which does not earn at all like children and the senior citizens but they are also included while calculating per capita income. National income rises but its distribution make the rich richer and the poor poorer.