Q15 of 20 Page 2

Distinguish between domestic and national product. When can domestic product be greater than the national product?

Difference between domestic product and national product-



When net factor income from abroad is negative (it means factor income to abroad be more than factor income from abroad), in that case domestic product can be greater than national product.


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Explain with an example, factor income to abroad and factor income from abroad.

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Explain the impact of rise in exchange rate on national income.

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In a single day Suraj, the barber, collects Rs 500 from haircuts; over this day, his equipment depreciates in value by Rs 50. Of the remaining Rs 450, Raju pays sales tax worth Rs 30, takes home Rs 200 and retains Rs 220 for improvement and buying of new equipment. He further pays Rs 20 as income tax from his income. Based on this information, complete Raju’s contribution to the following measures of income (a) Gross Domestic Product (b) NNP at market price (c) NNP at factor cost (d) Personal income (e) Personal disposable income.