Why can poverty remain even when per capita income rises?
Answer and explanation
Correct answer: Because income distribution can be unequal
Per capita income is only an average: it divides total income by the population. The average may rise because income gains are concentrated among richer households, while poor households receive little or no increase. Poverty can therefore persist despite higher average income. A complete assessment also considers distribution, employment, prices, and access to basic services. Option A is correct.
Frequently asked questions
What is the correct answer to this question?
Because income distribution can be unequal
Why is this the correct answer?
Per capita income is only an average: it divides total income by the population. The average may rise because income gains are concentrated among richer households, while poor households receive little or no increase. Poverty can therefore persist despite higher average income. A complete assessment also considers distribution, employment, prices, and access to basic services. Option A 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.
