Identify the situation when value of Domestic Income is equal to the value of National Income.
Answer & explanation
Correct answer: option 2
Domestic income is the monetary value of all final goods and services produced within the domestic territory of a country during the period of one year. If net factor income earned from abroad (by normal residents of the country) is added to it, it becomes national income of the country.
National income = Domestic income + Net factor income from abroad
Thus, when NFIA = 0 in that case the National income will be equal to the domestic income.