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Question : 18
Total: 19
Export are not a part of Net Factor Income from abroad'. Elaborate the reason behind the given statement.
Solution:
(ii) Exports are not a part of NFLA.
Reasons:
1. NFIA represents the difference between factor income from abroad and factor income to abroad. And Factor income is the reward for rendering factor services i.e. Rent, wages and salaries, interest and profit.
2. Exports represent the demand (or Expenditure on) of domestically produced goods and services by foreigners. So, it is a part of GDP.
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