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If two countries have equal NNP_FC but different populations, what should be done in a welfare comparison?

Answer and explanation

Correct answer: Per capita NNP_FC should also be checked

Total NNP_FC shows the aggregate income of normal residents, but it does not show how much income is available on average for each person. When populations differ, equal total NNP can imply very different average incomes and access to goods and services. Per capita NNP_FC, calculated as total NNP_FC divided by population, is therefore an important additional indicator, although welfare also depends on distribution and non-monetary factors.

Related tags

EconomicsPer Capita NnpWelfare ComparisonPopulationNational IncomeGdp And WelfareNational Income And Related AggregatesClass 11 Mcq

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