Question

Why do we use average to compare the development of the countries? Are there any limitations to this use? Explain briefly.

Answer 1

averages are used for better understanding

for comparision between countries total income is not very useful

 different countries have different population, so total income will not tell us what an average percent is likely to earn

limitations :

average income doesn't depicts how the income is distributed among the people. some may be rich but the masses may be poor

Answer 2

Use of averages to compare development :

(i) Averages are used for better understanding.

(ii) For comparison between countries, total income is not very useful.

(iii) Different countries have different populations, so total income will not tell us what an average person is likely to earn.

(iv) According to the World Bank, countries with per capita income of US $ 12616 per annum and above in 2012 are called rich countries, and those below US $ 1035 per annum or less are poor.

Limitation : Average income does not depict how the income is distributed among the people. Some may be very rich but the masses may be poor.

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