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Question

Consider the following statements about Middle-income trap:

I. Middle-income trap is a situation in middle-income countries where they are not able to move up to higher-income status.

II. Low-income countries are those with a per capita income lower than $1005.

III. Second category is the middle-income group with a per capita income varying from $1006 to $ 12235.

Which of the above statement(s) is/are correct?

A I only Correct Answer Incorrect Answer
B II only Correct Answer Incorrect Answer
C III only Correct Answer Incorrect Answer
D Both II and III Correct Answer Incorrect Answer
E All are correct Correct Answer Incorrect Answer

Solution

The World Bank is classifying countries in terms of per capita income. Low-income countries are those with a per capita income lower than $ 1,005. The second category is the middle-income group with a per capita income varying from $ 1,006 to $ 12,235. Countries with a PCI of $12236 and above are classified as higher-income economies. An irony about middle-income countries is that many of them are not moving up to the higher income category where the per capita income is above $12736.

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