Page 166 - Understanding Economics for Class 10

36. For comparing countries, their income is considered to be one of the most important attributes.
Countries with higher income are more developed than others with less income. This is based
on the understanding that more income means more of all things that human beings need.
Whatever people like, and should have, they will be able to get with greater income. So, greater
Goyal Brothers Prakashan
income itself is considered to be one important goal. Now, what is the income of a country?
Intuitively, the income of the country is the income of all the residents of the country. This
gives us the total income of the country. However, for comparison between countries, total
income is not such a useful measure. Since, countries have different populations, comparing
total income will not tell us what an average person is likely to earn. Are people in one
country better off than others in a different country? Hence, we compare the average income
which is the total income of the country divided by its total population. The average income
is also called per capita income. In World Development Reports, brought out by the World
Bank, this criterion is used in classifying countries. Countries with per capita income of US$
49,300 per annum and above in 2019, are called high income or rich countries and those with
per capita income of US$ 2500 or less are called low-income countries. The rich countries,
excluding countries of Middle East and certain other small countries are generally called
developed countries..
1. Explain the significance of per capita Income. [2]
2. What are the classifications of countries based on per capita income, and which entity
is responsible for determining these classifications? [2]

SECTION F
MAP SkIll-BASED QuESTIONS [2 + 3 = 5]

37(a) Two places A and B have been marked on the given outline map of India. [2]
Identify them and write their correct names on the lines drawn near them.
(i) Indian National congress session at this place in 1920.
(ii) The place where Mahatma Gandhi broke the salt law.

P-146 Economics Class X