Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Identify normal residents of India from amongst the following.

Options:

Seasonal workers coming to India from Bangladesh.

Medical patients going from India to the U.S.A, for treatment.

A Japanese woman working in the office of W.H.O. located in India for less than one year.

Australian ambassador posted in New Delhi.

Correct Answer:

Medical patients going from India to the U.S.A, for treatment.

Explanation:

A normal resident is said to be a person or an institution who ordinarily resides or is located in a country and whose centre of economic interest lies in that country. Thus, there are two conditions to become a normal resident of a country i.e. the stay in the country should be more than a year and interest of staying in that country should be economic. (The resident carries out the basic economic activities of earnings, spending and accumulation from that location). Thus, option 2 stands to be correct as pateints going to US are originally residing in India and have their economic interest in the country in which they are residing. Seasonal workers come to India only in the season when they have job and not the entire year. Option 3 is excluded as any activity which involves less than 1-year mark is automatically excluded. All the foreign staff of embassies (Australian ambassadors in India), officials, diplomats, etc are not considered normal residents of the country in which they operate.