Q23 of 25 Page 1

(a) Define ‘net factor income from abroad’. How is it different from ‘net exports'?

(b) Calculate the value of ‘‘Rent’’ from the following data :


Net Factor Income from Abroad (NFIA) is the difference between the factor income received and paid abroad.

The difference between the factor income earned in earned by the residents of a particular country X and the factor income earned by the foreigners in country X.


Net exports are the difference between export and import.


(b)



Answer: GDP(MP)=Compensation of employees+mixed income of self employed+operating surplus+depreciation+net indirect tax


=> 18000=6000+7000+rent+975+800+2000


=> Rent=Rs1225


More from this chapter

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20

How is Real Gross Domestic Product (GDP) different from NominalGross Domestic Product (GDP)? Explain using a numerical example.

 21

Explain how the government can use the budgetary policy in reducing inequality of income in the economy.

OR


Discuss briefly the role of the government budget in influencing ‘‘allocation of resources’’ in the economy.


 22

What is meant by the ‘‘Effective Demand Principle'' in the Keynesian theory of employment? Discuss using a schedule or a diagram.

 24

(a) State any two factors responsible for inflow of foreign currency.

(b) State on which side of capital account/current account will the following transactions be recorded and why : Current Account reflects the nation's net income.


OR


(a) Distinguish between Autonomous and Accommodating transactions of Balance of Payments account.


(b) Distinguish between the depreciation of currency and devaluation of a currency.