If a country's domestic income is ₹1,800 crore and net factor income from abroad is −₹120 crore, what is its national income?
Answer and explanation
Correct answer: ₹1,680 crore
National income is calculated by adding net factor income from abroad (NFIA) to domestic income: National Income = Domestic Income + NFIA. Therefore, ₹1,800 crore + (−₹120 crore) = ₹1,680 crore. The negative NFIA reduces national income because factor income paid abroad exceeds factor income received from abroad. Hence, option C is correct.
Frequently asked questions
What is the correct answer to this question?
₹1,680 crore
Why is this the correct answer?
National income is calculated by adding net factor income from abroad (NFIA) to domestic income: National Income = Domestic Income + NFIA. Therefore, ₹1,800 crore + (−₹120 crore) = ₹1,680 crore. The negative NFIA reduces national income because factor income paid abroad exceeds factor income received from abroad. Hence, option C is correct.
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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