Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

 

Items

 In crores 

1

 Private final consumption expenditure 

397

2

 Exports

28

3

 Govt. Final consumption expenditure

919

4

 Gross fixed capital formation

764

5

 Opening stock

30

6

 Closing stock

35

7

 Consumption of fixed capital

100

8

 Imports

50

9

 Net factor income from abroad

(-)200

10

 Subsidies

40

 11 

 Indirect taxes

45

Which statement is true to get Net factor income from abroad?

Options:

Factor income from abroad + factor income to abroad

Factor income from abroad - factor income to abroad

Factor income to abroad - factor income from abroad

Factor income to abroad > factor income from abroad

Correct Answer:

Factor income from abroad - factor income to abroad

Explanation:

Net factor income from abroad = Factor income earned by the domestic factors of production employed in the rest of the world – Factor income earned by the factors of production of the rest of the world employed in the domestic economy).

Net factor income from abroad is calculated by subtracting factor income to abroad from factor income from abroad. This means that the statement "Factor income from abroad - factor income to abroad" is true.