Defining Per Capita Income
Per capita income is a key economic indicator that measures the average economic output per person in a specific area, usually a country, over a specific period. It is calculated by dividing the total national income by the total population.
Understanding the Calculation
The formula for per capita income is:
$ \text{Per Capita Income} = \frac{\text{Total National Income}}{\text{Total Population}} $
This calculation helps in assessing the standard of living and economic well-being of the population.
Identifying the Correct Term
The question asks what average amount is earned by a person. Based on the definition and calculation:
- Liability refers to debts or obligations, not earnings.
- Capital refers to assets or wealth, not the average earnings.
- Income directly represents the earnings or money received.
- Debt is money owed, the opposite of earnings.
Therefore, per capita income represents the average Income earned by a person.
Important Questions from National Income Accounting
Division of labour often involves
1. specialized economic activity.
2. highly distinct productive roles.
3. involving everyone in many of the same activities.
4. individuals engage in only a single activity and are dependent on others to meet their various needs.
Select the correct answer using the code given below:
Which of the following is NOT one of the methods of national income estimation?
Cash Reserve Ratio (CRR) is calculated as a percentage of each bank's _____.
What do you call a proportionate saving in costs gained by an increased level of production?
Which of the following statements is/are correct?
I. Only marketed goods and considered while estimating Gross Domestic Product (GDP).
II. The work done by a woman at her home is outside the purview of Gross Domestic Product.
III. In estimating GDP, only final goods and services are considered.
