The state of global income is an important factor in many aspects of the world economy and can have a profound effect on the way businesses operate, the way public policy is formed, and the overall life of people around the world. In order to gain insight into this phenomenon, we must first understand exactly what the statement(s) below are referring to when they discuss global income.
Low Income Countries
According to The World Bank, countries are classified into four main income groups based on the nations’ gross national income per capita. The income groups are low, lower-middle, upper-middle, and high income. Low income countries are those countries whose gross national income per capita is $995 or less. These countries often find it difficult to provide basic services and necessities to their citizens.
Upper-Middle Income Countries
Upper-middle income countries are those nations whose gross national income per capita is between $996 and $3,895. These countries have higher economic development than low income countries, but are still struggling to reach the same level as countries with a higher income per capita. Common characteristics of upper-middle income countries include slower economic growth rates, higher levels of income inequality, and higher levels of poverty than countries with a higher per capita income.
High Income Countries
High income countries are those with a gross national income per capita of $3,896 or more. These nations have strong economies and are often the leading countries in terms of technology, education, health, and other development indicators. Some of the advantages of high income countries include a higher quality of life, better educational and health outcomes, and better access to resources.
The following statement is true about global income: Countries are classified based on their gross national income per capita into four main categories: low income, lower-middle income, upper-middle income, and high income.