Average income is important but it has limitations while using it. Explain.

Income is also an important criterion for comparing the countries because it helps in fulfilling the greater demands of the people. Higher income countries are more developed than the lower income countries. But it has limitation too.

  1. Average income hides the disparity.
  2. Average income does not tell us the distribution of income among the people.
  3. It is just a material criteria for the comparison.

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