If domestic income is ₹6,400 crore and national income is ₹6,050 crore, what is the value of NFIA?
Answer and explanation
Correct answer: −₹350 crore
The relationship between national income and domestic income is: National Income = Domestic Income + Net Factor Income from Abroad (NFIA). Rearranging gives NFIA = National Income − Domestic Income. Substituting the values gives ₹6,050 crore − ₹6,400 crore = −₹350 crore. The negative sign means that factor income paid to foreign residents is greater than factor income received from abroad. This question tests an aggregate relationship rather than the expenditure method itself.
Frequently asked questions
What is the correct answer to this question?
−₹350 crore
Why is this the correct answer?
The relationship between national income and domestic income is: National Income = Domestic Income + Net Factor Income from Abroad (NFIA). Rearranging gives NFIA = National Income − Domestic Income. Substituting the values gives ₹6,050 crore − ₹6,400 crore = −₹350 crore. The negative sign means that factor income paid to foreign residents is greater than factor income received from abroad. This question tests an aggregate relationship rather than the expenditure method itself.
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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