If an Indian resident earns factor income abroad, how will it be treated in national income?
Answer and explanation
Correct answer: As factor income from abroad
Factor income earned by an Indian resident from abroad is included in India’s national income because national income is measured according to the ownership or residence of factor services. It is recorded as factor income from abroad and forms part of net factor income from abroad when income paid to foreign factors is deducted. It is not intermediate consumption, depreciation, or an indirect tax.
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What is the correct answer to this question?
As factor income from abroad
Why is this the correct answer?
Factor income earned by an Indian resident from abroad is included in India’s national income because national income is measured according to the ownership or residence of factor services. It is recorded as factor income from abroad and forms part of net factor income from abroad when income paid to foreign factors is deducted. It is not intermediate consumption, depreciation, or an indirect tax.
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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