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Class 10 > Learn Class IX-X Tuition > Why per capita income is used to measure the economy...
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Why per capita income is used to measure the economy of a country?

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Per capita income is often used to measure an area's average income. This is used to compare the wealth of one population with those of others. Per capita income is often used to measure a country's standard of living
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Total income the whole country's population earns distributed by the population gives per head income of a countryman. This PC Income is a measure of prosperity or standard of living of a country. If this figure grows beyond the inflation rate over the years, then the country's standard is said to be...
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Total income the whole country's population earns distributed by the population gives per head income of a countryman. This PC Income is a measure of prosperity or standard of living of a country. If this figure grows beyond the inflation rate over the years, then the country's standard is said to be increasing. This PC income cannot be directly compared with other country's figures without adjusting to Purchasing Parity. Then it can be compared to find out which country is more prosperous. This is a simplified explanation of prosperity comparison through PC Income read less
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Per capita income refers to the income earned by every person in a particular area or country. It's very simple to understand that if every person in a country is having a higher income, the standards of living will certainly increase. When every person is having a higher living standards, it means that...
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Per capita income refers to the income earned by every person in a particular area or country. It's very simple to understand that if every person in a country is having a higher income, the standards of living will certainly increase. When every person is having a higher living standards, it means that the country has prospered as its citizens have prospered. read less
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per capita income = Real National Income/ Total population If the rate of population surpasses the rate of national income growth, then per capita national income will fall. Similarly if both national product and population grow at the same rate, per capita national product will remain constant. This...
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per capita income = Real National Income/ Total population If the rate of population surpasses the rate of national income growth, then per capita national income will fall. Similarly if both national product and population grow at the same rate, per capita national product will remain constant. This is not economic development. Therefore it is not rise in real national income but rise in real per capita income which may be taken as an indicator of development. Hence there is the urgent needs to check the growth rate of population and to accelerate the rate of national growth, particularly in underdeveloped countries so that the real per capita income will rise. read less
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