TYPES OF COUNTRIES

When you walk around almost any town or city, you can see different activities occurring. These differences show you the economic inequality – the difference between people according to their wealth, things they own and the money they earn. The money that people earn is called their income. This economic inequality is not only in your town, but it is all around the world. According to economics, there are two types of countries in the world. These two categories depend on per capita income. Per capita income is the yearly average money a person earns. It is calculated by total national income (the total of how much everybody earns in a country) of a country and dividing it by the number of the people living in that country. For example, if a small country has a total national income of $800,000 and a population of 20 people, then its per capita income is $40,000. The first economic category is called developed nations. They are more industrialised and have higher per capita income levels. If you want to be a developed country, your per capita income must be $12,000 and above. The list of developed nations includes the USA, Canada, Japan, Republic of Korea, Australia, New Zealand, Scandinavia, Singapore, Taiwan, Israel, countries of Western Europe and some Arab states. The economies of these countries grow steadily every year. The second economic category is developing nations. They are less industrialised and have lower per capita income levels. Developing countries have per capita income of between $1,000 and $12,000. The major developing countries are Mexico, China, Indonesia, Jordan, Thailand, Fiji, Ecuador and many Arab states.