Factor income earned by a resident in a company located abroad is not directly part of which aggregate?
Answer and explanation
Correct answer: NDP
NDP measures net production generated within a country's domestic territory. Income earned by a resident from production or employment abroad is outside that territory, so it is not directly included in domestic product. It is classified as factor income from abroad and is used, together with factor income paid abroad, to calculate NFIA and convert domestic aggregates into national aggregates.
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What is the correct answer to this question?
NDP
Why is this the correct answer?
NDP measures net production generated within a country's domestic territory. Income earned by a resident from production or employment abroad is outside that territory, so it is not directly included in domestic product. It is classified as factor income from abroad and is used, together with factor income paid abroad, to calculate NFIA and convert domestic aggregates into national aggregates.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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