If factor income received from abroad is 300 and factor income paid abroad is 380, what will be the net factor income from abroad?
Answer and explanation
Correct answer: −80
Net factor income from abroad is calculated as factor income received from abroad minus factor income paid abroad. Thus, NFIA = 300 − 380 = −80. The negative value shows that residents received 80 less from abroad than the factor income paid to non-residents. Therefore, option C is correct; 80 would incorrectly ignore the negative sign.
Frequently asked questions
What is the correct answer to this question?
−80
Why is this the correct answer?
Net factor income from abroad is calculated as factor income received from abroad minus factor income paid abroad. Thus, NFIA = 300 − 380 = −80. The negative value shows that residents received 80 less from abroad than the factor income paid to non-residents. Therefore, option C is correct; 80 would incorrectly ignore the negative sign.
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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