How to Compare Different Countries or States?
For comparing the countries, their income is considered to be one of the most important attributes, and countries which have higher income are more developed as compared to the other countries which have less income. As different countries usually have different populations, comparing the total income will not let us know what the average person earns. So, we compare the average income of the countries.
Average Income refers to the total income of the country which is divided among its total population and is known as per capita income.
Average Income or Per Capita Income: Total income of the country/Total population of the country
Example
Country A has a total income of 50,000/- INR & has a population of 10 citizens.
So, in this case, to calculate the average income we would simply do a simple calculation which is as follows:
50000/10 = 5000/- INR would be the average income of country A
In World Development Reports, brought out by the World Bank, this criterion is used in classifying countries:
- Countries with a per capita income of US$ 49,300 per annum and above in 2019, are called high-income or rich countries and those with a per capita income of US$ 2500 or less are called low-income countries.
- India comes in the category of low-middle-income countries because its per capita income in 2019 was just US$ 6700 per annum. The rich countries, excluding countries of the Middle East and certain other small countries, are generally called developed countries.
CBSE Class 10 Notes Economics Chapter 1: Development
In the CBSE Notes Class 10 Economics Chapter 1, you will learn about the concept of development, what it means, & how it is measured. The chapter begins with a discussion of the different ways in which people define development, & the various indicators that are used to measure it, such as Gross Domestic Product (GDP), Human Development Index (HDI), Average Income, Infant Mortality Rate (IMR), etc. The chapter also covers the different dimensions of development, such as economic, social, & political.
The chapter also examines the concept of sustainable development & the need to balance economic growth with environmental conservation. It concludes by highlighting the importance of inclusive & sustainable development in creating a better future for all. Overall, the chapter provides a broad introduction to the concept of development.
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