Three students were arguing as to what does the average income of a country actually means. Chintoo said, “Average income means national income”. But Mintoo said, “No, average income is per capita income.” To this, Hari said” No, average income is disposable income.” Who do you think is correct?

Mintoo

The correct answer is option 2: Mintoo

1. National Income: National income refers to the total income earned by factors of production within a country's borders over a specific period, such as a year. It includes income from wages, rents, interest, and profits earned by individuals and businesses within the country.

2. Per Capita Income: Per capita income is the average income earned per person in a country over a specific period. It is calculated by dividing the total national income by the population of the country.

3. Disposable Income: Disposable income is the income available to households after deducting taxes and other compulsory payments. It represents the amount of money that households have available for consumption and savings.

Given these definitions:

• Chintoo's statement that "average income means national income" is incorrect. Average income typically refers to per capita income, not national income.

• Mintoo's statement that "average income is per capita income" is correct. Per capita income is indeed the average income earned per person in a country.

• Hari's statement that "average income is disposable income" is incorrect. Disposable income is a measure of the income available to households after taxes, not the average income of the entire country.