Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Identify the situation when value of Domestic Income is equal to the value of National Income.

Options:

When there are no exports in the economy

When net factor income from abroad is zero

When net investment in the economy is zero

When there are no imports in the economy

Correct Answer:

When net factor income from abroad is zero

Explanation:

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.