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Meaning of the underdeveloped economy was
Countries in which per capita real income is balanced
Countries in which per capita real income is low
Countries in which per capita real income is high
Countries in which mass poverty is observed
None of the above
Countries in which per capita real income is low
An underdeveloped economy is technically defined by a low level of per capita real income compared to developed nations. This metric serves as a primary indicator of economic productivity and the standard of living of the population.
An underdeveloped economy is technically defined by a low level of per capita real income compared to developed nations. This metric serves as a primary indicator of economic productivity and the standard of living of the population.
World Bank classifies economies based on GNI per capita: Low-income, Lower-middle-income, Upper-middle-income, and High-income economies.
Underdeveloped economies typically feature high dependence on the primary sector (agriculture).
These nations are often characterized by low capital formation and technological backwardness.
The United Nations uses the 'Least Developed Countries' (LDC) category based on criteria including income, human assets, and economic vulnerability.
Low per capita income often leads to low savings rates, creating a vicious cycle of poverty as identified by economist Ragnar Nurkse.
Option A is incorrect because balanced income refers to stability, not the level of development.
Option C describes developed or advanced economies.
Option D describes a symptom of underdevelopment but is not the technical economic definition of the status.
B is correct тАФ An underdeveloped economy is officially characterized by low levels of per capita real income relative to developed peers.
When studying Indian Economy, compare the 'Underdeveloped' definition with the 'Developing' status of India, often linked to the Human Development Index (HDI) calculated by the UNDP.
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