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If a domestic company provides services worth ₹5 crore to a foreign customer and purchases services worth ₹2 crore from a foreign company, what is net service export?

Answer and explanation

Correct answer: ₹3 crore

The service supplied by the domestic company to the foreign customer is a service export of ₹5 crore. The service purchased from the foreign company is a service import of ₹2 crore. Net service exports equal service exports minus service imports: ₹5 crore − ₹2 crore = ₹3 crore. The result is positive because receipts from services sold abroad exceed payments for services bought from abroad. In the expenditure identity, this balance contributes to net exports, X − M.

Related tags

EconomicsService ExportsService ImportsNet ExportsGdp And WelfareNational Income And Related AggregatesClass 11 Mcq

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