Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following is not included in domestic territory of India?

Options:

Embassies, military establishments and consulates of foreign country located in our country

Embassies, military establishments and consulates of our country located in another country

Chinese bank located in India

All of the above

Correct Answer:

Embassies, military establishments and consulates of foreign country located in our country

Explanation:

The correct answer is option 1: Embassies, military establishments and consulates of foreign country located in our country.

The concept of "domestic territory" in economics refers to the geographical boundaries within which a country's economic activities are measured. This includes all production units, resources, and residents engaged in production and consumption activities within these boundaries. However, there are specific exclusions and inclusions regarding embassies, military establishments, and consulates.

Here’s the breakdown for each option:

  • Embassies, military establishments, and consulates of foreign countries located in our country: These are not considered part of the domestic territory of the host country. They are considered part of the domestic territory of the country they represent.

  • Embassies, military establishments, and consulates of our country located in another country: These are considered part of the domestic territory of the home country, despite being geographically located in another country.

  • Chinese bank located in India: This is included in the domestic territory of India because it operates within the geographical boundaries of India and is subject to Indian economic activity measurements.