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What is average income?

What is average income? Also write down the formula to calculate the average income of the country. Find the answer to the question and access the vast question bank that is customized for students.

Answer: The average income is the amount of money earned by each person in a specific location during a certain period of time.

The average income earned per person in a certain location (city, region, nation, etc.) in a given year is measured by per capita income (PCI). It is computed by dividing the total income of the region by the entire population of the area.

Average income is frequently used to compare the wealth of various populations and to assess the average income of a sector. The level of life of a country is frequently measured using average income.

It’s valuable since it’s well-known, easy to calculate using publicly accessible GDP and population figures, and generates a good statistic for comparing wealth between sovereign territories. It is also used to calculate a country’s Human Development Index. Average income is another term for per capita income.

It’s computed as follows:

Average Income=

total income of the area

total population of that area