MACROECONOMICS W/CONNECT
18th Edition
ISBN: 9781307253092
Author: McConnell
Publisher: Mcgraw-Hill/Create
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Question
Chapter 22, Problem 1DQ
To determine
The Categorization of countries by World Bank.
Expert Solution & Answer
Explanation of Solution
The World Bank is the International Financial Institution which provides loans for all the countries in order to bridge their capital needs with the investment and programs. All the countries of the world are categorized into four categories or groups by the World Bank on the basis of the GNI per capita of the country. They are the following:
Low-income Economies: It is the group of countries whose GNI per capita is less than $1,005. The examples for the low-income economies are Senegal and Liberia.
Lower middle- income Economies: It is the group of countries which has the GNI per capita income between $1,006 and $3,955. The examples for the Lower-middle income group of economies are India and Indonesia.
Upper middle- income Economies: It is the group of countries which has the GNI per capita income between the $3,956 and $12,235. The examples for the upper middle- income group economies are the Croatia and Samoa.
High- income Economies: They are the countries that have their GNI per capita income $12,235 or more. The best examples for the High –income economies are Germany and Czech Republic.
Economics Concept Introduction
Concept introduction:
World Bank: It is the International Bank that provides long term loans for the World countries for their capital needs and programs.
Gross
GNI per capita: It is the Gross National Income divided by the total population of the country. Thus it is the GNI per head.
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