Question

Write any two limitations of per capita income as an indicator of development

Answer 1

Limitations of Per capita income as an indicator of development:

1.It does not indicate the disparities in the distribution of income.

Example:The wide gap between the incomes of extremely rich and very poor people.

2.It does not indicate long term sustainability as non renewable resources are liable to be exhausted.

3.The method of calculating per capita income also varies among countries.This is not highly appropriate for comparison.

4.It does not tells us about other criterions on which the countries are compared.

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