Which of the following best explains an important limitation of per capita national income? (1 point)

Question

• Per capita national income does not take population size into account.
• Per capita national income does not take total national income into account.
• Wealth distribution in most countries is uneven.
• Wealth distribution in most countries is uniform.

Answer 1

The statement that best explains an important limitation of per capita national income is:

• Wealth distribution in most countries is uneven.

This highlights that per capita national income can give a misleading picture of a country's wealth because it averages income across the entire population, without accounting for how that income is distributed among individuals. An economy might have a high per capita income, but if wealth is concentrated in a few hands, many people could still be living in poverty.