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Identify the situation when value of Domestic Income is equal to the value of National Income.
- a)When there are no exports in the economy
- b)When net factor income from abroad is zero
- c)When net inv estment in the econom y is zero
- d)When there are no im ports in the economy
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Identify the situation when value of Domestic Income is equal to the v...
National Income = Domestic Income + Net Factor Income from Abroad (NFIA). When NFIA = 0, National Income = Domestic Income
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Identify the situation when value of Domestic Income is equal to the v...
Explanation:
Net factor income from abroad:
When net factor income from abroad is zero, it means that the income earned by domestic residents from abroad is equal to the income earned by foreign residents from the domestic economy. This includes factors such as wages, interest, profits, and dividends.
Domestic Income vs. National Income:
- Domestic income refers to the total income earned within the borders of a country, including both residents and non-residents.
- National income, on the other hand, includes domestic income plus net factor income from abroad.
Equality of Domestic Income and National Income:
When net factor income from abroad is zero, the value of national income is essentially the same as the value of domestic income. This is because the income earned by domestic residents from abroad cancels out the income earned by foreign residents in the domestic economy.
Conclusion:
Therefore, in the given scenario, the value of domestic income is equal to the value of national income when net factor income from abroad is zero. This signifies a balance in the flow of income between domestic residents and foreign entities, resulting in an equilibrium between domestic and national income.
Net factor income from abroad:
When net factor income from abroad is zero, it means that the income earned by domestic residents from abroad is equal to the income earned by foreign residents from the domestic economy. This includes factors such as wages, interest, profits, and dividends.
Domestic Income vs. National Income:
- Domestic income refers to the total income earned within the borders of a country, including both residents and non-residents.
- National income, on the other hand, includes domestic income plus net factor income from abroad.
Equality of Domestic Income and National Income:
When net factor income from abroad is zero, the value of national income is essentially the same as the value of domestic income. This is because the income earned by domestic residents from abroad cancels out the income earned by foreign residents in the domestic economy.
Conclusion:
Therefore, in the given scenario, the value of domestic income is equal to the value of national income when net factor income from abroad is zero. This signifies a balance in the flow of income between domestic residents and foreign entities, resulting in an equilibrium between domestic and national income.
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Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer?
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Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer?.
Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer? for Humanities/Arts 2024 is part of Humanities/Arts preparation. The Question and answers have been prepared according to the Humanities/Arts exam syllabus. Information about Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Humanities/Arts 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Identify the situation when value of Domestic Income is equal to the value of National Income.a)When there are no exports in the economyb)When net factor income from abroad is zeroc)When net inv estment in the econom y is zerod)When there are no im ports in the economyCorrect answer is option 'B'. Can you explain this answer?.
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