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What is the main Criterion used by the World Bank in classifying different countries ? what are the limitations of this Criterion if any ?
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What is the main Criterion used by the World Bank in classifying diffe...
The main criterion used by the World Bank in classifying different countries is their Gross National Income (GNI) per capita. GNI per capita is the total value of goods and services produced by a country in a year, divided by its population. The World Bank classifies countries into four categories based on their GNI per capita:

1. Low-income countries: Countries with a GNI per capita of $1,035 or less.
2. Lower-middle-income countries: Countries with a GNI per capita between $1,036 and $4,045.
3. Upper-middle-income countries: Countries with a GNI per capita between $4,046 and $12,535.
4. High-income countries: Countries with a GNI per capita of $12,536 or more.

Limitations of this Criterion:

1. Inequality: GNI per capita does not account for income inequality within a country. Two countries with the same GNI per capita can have vastly different levels of income inequality. This means that some people in a country may be living in poverty even if the country is classified as middle or high-income.

2. Purchasing power: GNI per capita is calculated using market exchange rates, which do not reflect the purchasing power of a country's currency. This can lead to an overestimation or underestimation of a country's economic strength.

3. Informal economy: GNI per capita does not account for the informal economy, which can be a significant part of the economy in some low-income countries. This means that the GNI per capita may not accurately reflect the economic activity in these countries.

4. Natural resources: GNI per capita does not account for a country's natural resources, which can be a significant source of income in some countries. This means that some countries may have a higher GNI per capita due to natural resources rather than their economic strength.

In conclusion, while GNI per capita is a useful criterion for classifying countries, it has its limitations and should be used in conjunction with other indicators to get a more complete picture of a country's economic situation.
Community Answer
What is the main Criterion used by the World Bank in classifying diffe...
Per capita income is the main Criterion used by the World Bank in classifying different countries . the limitation of this Criterion are
. per capita income is useful for comparison but it doesn't show the distribution of income
. it also ignore other factors such as infant mortality rate literacy level Healthcare etc.
. per capita income does not give the true picture as their is a use population which does not at all like children and the senior citizen but they are also included while calculating per capita income.
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Read the source given below and answer the questions that follows: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 income itself is considered to be one important goal. The income of the country is the income of all the residents of the country. This give 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$ 12,056 per annum and above in 2017, are called rich countries and those with per capita income of US$ 955 or less are called low-income countries. India comes in the category of low middle income countries because its per capita income in 2017 was just US$ 1820 per annum. The rich countries, excluding countries of Middle East and certain other small countries, are generally called developed countries.Human Development Report published by UNDP compares countries based on the educational levels of the people, their health status and per capita income.Q. What is the main criterion used by the World Bank in classifying different countries?

Read the source given below and answer the questions that follows: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 income itself is considered to be one important goal. The income of the country is the income of all the residents of the country. This give 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$ 12,056 per annum and above in 2017, are called rich countries and those with per capita income of US$ 955 or less are called low-income countries. India comes in the category of low middle income countries because its per capita income in 2017 was just US$ 1820 per annum. The rich countries, excluding countries of Middle East and certain other small countries, are generally called developed countries.Human Development Report published by UNDP compares countries based on the educational levels of the people, their health status and per capita income.Q. The compares the development of the countries on the basis of literacy rate, gross enrolment ratio and health status of their people.

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What is the main Criterion used by the World Bank in classifying different countries ? what are the limitations of this Criterion if any ?
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