Correct Option
The correct option is 2 and 3 only.
Explanation
Total Income represents the aggregate earnings of a country. While it provides an estimate of the overall economic size of a nation, it is often insufficient as a standalone indicator for development or standard of living because it does not factor in demographic variations.
Statement-wise Analysis
- Statement 1 is Incorrect. Total Income is not the most appropriate measure for comparing the economic well-being of citizens across different countries. Since countries have different population sizes, comparing total income does not indicate how much the average person earns. For such comparisons, Per Capita Income (Average Income) is the standard measure.
- Statement 2 is Correct. Total Income fails to account for differences in population size. A country with a large population may have a high total income, but the income available per person might be very low. Conversely, a smaller country with a lower total income might have a higher standard of living if the population is small.
- Statement 3 is Correct. By definition, the Total Income of a country is calculated by summing the incomes of all its residents. This aggregate figure represents the total value generated by the residents of the nation.
Key Takeaway
Total Income measures the absolute economic size of a country, whereas Per Capita Income adjusts for population size, making it the correct metric for comparing the average economic well-being between nations.