Which of the following best explains an important limitation of per capita national income?

Question

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

Answer 1

The statement 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 does not reflect how income is distributed among the population. This means that a high per capita income can mask significant inequalities, where a large portion of the population earns much less than average.