Chapter 1

NCERT
Class 10
Economics
Solutions
4. What is the main criterion used by the World Bank in classifying different countries? What are the limitations of this criterion, if any?

Question:

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

Answer:

The World Bank considers the country's income as a major criterion for classifying the different classes of any country. The countries of the world which have high income are considered developed, while countries with low income are considered less developed. It is believed that more income means that all the things required by the human being can be made available in abundance. Whatever things people like and want to have, they will be able to get all those things through more income. That's why higher income is accepted as the main criterion for classification of different classes.

This criterion has been used to classify countries in the 'World Development Report, 2012' of the world bank. Countries with per capita income of $13,205 per year or more in 2022 are rich countries and countries with per capita income of $1,085 per year or less are called low income countries. India comes in the category of middle income country, as its per capita income was only $2,277 per year in 2021.

Limitations of the Criteria: The national income of a country cannot be considered a good criterion for the classification of different countries, because the population of different countries is different. By comparing total income, we cannot find out what the average person can earn. Due to this, we do not even get to know the conditions of the people of different countries. Therefore, national income is not a good measure of classification.

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