Consider the following data relating to the financial year 2021-2022 and answer the following questions based on this data.
What is the value of Net Factor Income from/to Abroad?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: - ₹10,000
NDPMP + Net Factor Income from Abroad = NNPMP
₹ 1,00,000 + Net factor income from abroad = ₹ 90,000
Net factor income from abroad = ₹ 90,000 – ₹ 1,00,000 = -10,000
Negative sign means it is net factor income to abroad.
Alternatively:
The formula for NFIA is:
NFIA = NNPMP - NDPMP
NFIA=90,000-100,000=-10,000
NDPMP stands for net domestic product at market prices. It is GDPMP minus consumption of fixed capital (depreciation).
NNPMP stands for net national product at market prices. It is NDPMP plus net factor income from abroad.