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When will the domestic income be greater than the national income?
- a)IF Net factor income earned from abroad is zero
- b)IF Net factor income earned from abroad is 1
- c)IF is negative
- d)IF Net factor income earned from abroad is positive
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
When will the domestic income be greater than the national income?a)IF...
Gross National Income = Gross Domestic Income + Net Factor Income from Abroad
where,
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.
Most Upvoted Answer
When will the domestic income be greater than the national income?a)IF...
Explanation:
Domestic income refers to the income earned within the domestic territory of a country, while national income refers to the total income earned by a country, both domestically and from abroad. Therefore, the domestic income can never be greater than the national income.
Options (a) and (d) are incorrect because the net factor income earned from abroad is a crucial variable that determines the national income. If it is zero, the national income equals the domestic income, and if it is positive, the national income is greater than the domestic income.
Option (b) is incorrect because the net factor income earned from abroad cannot be greater than the national income.
Option (c) is the correct answer because a negative net factor income earned from abroad implies that the country is paying more to foreign factors of production than it is receiving from its own factors of production employed abroad. This results in a decrease in the national income, making it less than the domestic income.
In summary, the domestic income can never be greater than the national income, and a negative net factor income earned from abroad results in a national income lower than the domestic income.
Domestic income refers to the income earned within the domestic territory of a country, while national income refers to the total income earned by a country, both domestically and from abroad. Therefore, the domestic income can never be greater than the national income.
Options (a) and (d) are incorrect because the net factor income earned from abroad is a crucial variable that determines the national income. If it is zero, the national income equals the domestic income, and if it is positive, the national income is greater than the domestic income.
Option (b) is incorrect because the net factor income earned from abroad cannot be greater than the national income.
Option (c) is the correct answer because a negative net factor income earned from abroad implies that the country is paying more to foreign factors of production than it is receiving from its own factors of production employed abroad. This results in a decrease in the national income, making it less than the domestic income.
In summary, the domestic income can never be greater than the national income, and a negative net factor income earned from abroad results in a national income lower than the domestic income.
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Community Answer
When will the domestic income be greater than the national income?a)IF...
Gross National Income = Gross Domestic Income + Net Factor Income from Abroad
where,
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.
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When will the domestic income be greater than the national income?a)IF Net factor income earned from abroad is zerob)IF Net factor income earned from abroad is 1c)IF is negatived)IF Net factor income earned from abroad is positiveCorrect answer is option 'C'. Can you explain this answer?
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