What different information does per capita income provide compared with national income?
Answer and explanation
Correct answer: The average income per person
National income measures the total income generated by an economy during a period. Per capita income divides national income by the population and therefore gives an average income per person. It is useful for comparing average economic resources across countries or years, although it does not reveal income distribution or inequality. Hence option B is correct.
Frequently asked questions
What is the correct answer to this question?
The average income per person
Why is this the correct answer?
National income measures the total income generated by an economy during a period. Per capita income divides national income by the population and therefore gives an average income per person. It is useful for comparing average economic resources across countries or years, although it does not reveal income distribution or inequality. Hence option B is correct.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
