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

Question

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

Answer 1

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

• Wealth distribution in most countries is uneven.

Per capita national income provides an average income per person, but it does not reveal how income is distributed among the population. In many countries, a significant portion of the national income may be held by a small percentage of the population, leading to inequality that the per capita figure does not capture.