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.
Frequently asked questions
What is the correct answer to this question?
₹3 crore
Why is this the correct answer?
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.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
