Parameters Of Development — Important Questions

National Income ÷ Total Population

Step 1: Per Capita Income means 'income per person' or average income. Step 2: To find the average income of each person in a country, we divide the total national income by the total number of people (population). Step 3: Formula: Per Capita Income = National Income ÷ Total Population. Step 4: Option B reverses the formula — dividing population by income gives no meaningful value. Step 5: Multiplying or subtracting are mathematically incorrect operations for calculating an average.

Takes into account both national income and population together

Step 1: A country's national income can grow, but if population grows faster, the average person may still be worse off. Step 2: Per Capita Income solves this by considering BOTH national income AND population size together. Step 3: This gives a truer picture of how much income is available per person on average. Step 4: Options B, C, and D describe incorrect features — PCI does not focus only on the poor, nor does it ignore population. Step 5: Hence, PCI is a more meaningful indicator than simple national income.

World Bank

Step 1: The chapter specifically mentions that countries are classified based on per capita income data. Step 2: The World Bank ranks countries into four categories — high, upper-middle, lower-middle, and low income — based on per capita income measured in US dollars. Step 3: The IMF deals with financial stability and balance of payments, not country classifications based on PCI. Step 4: WTO handles trade, and UNESCO deals with education and culture — neither classifies countries by PCI. Step 5: Therefore, the World Bank is the correct answer.

United Nations Development Programme (UNDP)

Step 1: The chapter clearly states the origin of the HDI concept. Step 2: The UNDP introduced the HDI in its first Human Development Report published in 1990. Step 3: This report was prepared under the leadership of Mehbub-ul-Haq. Step 4: The World Bank focuses on poverty reduction and loans; IMF on financial stability; RBI is India's central bank — none of them created HDI. Step 5: UNDP has been publishing the Human Development Report every year since 1990.