Distinguish between domestic product and national …
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Posted by Prabhav Upadhyay 4 years, 10 months ago
- 2 answers
Yogita Ingle 4 years, 10 months ago
Basically, Domestic Product and National Product are distinguished on the basis of the Net factor Income From Abroad (NFIA). While Domestic Product includes factor income paid only to the domestic residents of the native country with the domestic territory of a country, on the other hand, National product besides including the factor income paid to the domestic residents, also includes the factor income paid to the domestic residents residing on the foreign lands. In simple words, Domestic Product excludes NFIA, whereas, National Product includes NFIA.
Algebraically, Domestic Product = National Product – NFIA**
⇒National Product – (Factor Income earned by the domestic residents – Factor Income paid to the foreign residents)
and National Product = Domestic Product + NFIA**
⇒ Domestic Product + (Factor Income Earned by the domestic residents – Factor Income paid to the foreign residents)
** where, NFIA refers to the difference of factor income earned from foreign and the factor income paid to the foreigners.
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Nagasaki Ali 4 years, 10 months ago
1Thank You