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The given statement is refuted. Net factor income from abroad is the difference between factor income earned from the rest of the world and factor income paid to the rest of the world. If the value of factor income paid…
The given statement is refuted. Gross investment includes addition to capital stock which also includes replacement for the normal wear and tear (depreciation). Whereas, addition to capital stock in an economy is measured by net investment. So, in an accounting…
The given statement is not correct and is thus refuted. Final goods are those goods which are purchased/consumed either by households or by the producers for investment purpose, i.e., these are the goods which have crossed the production boundary.
The given statement is refuted. The end-use of the machine determines whether it is a capital good or not. For example, 1st Case: Purchase by a household A machine purchased by a household (say, computer, refrigerator, etc.) is a consumption…
(a) Milk purchased by a tea stall. It is an intermediate good as milk is purchased by a tea stall for further production. (b) Bus purchased by a school. It is a final good as bus is treated as an…
(a) A car used as a taxi: It is a capital good because it is used for producing services for generating income. (b) Refrigerator in a hotel: It is a capital good because it is used for providing services over…
Factor income to abroad refers to factor income paid to the normal residents of other countries (i.e., non-residents) for their factor services within the economic territory. Components of factor income to abroad: (i) Compensation of employees paid to the non-resident…
Answer:- (i) Machine purchased by a firm. It is a Final Goods, as Machine purchased by a firm is not meant for sale, it is purchased for their own use that would help in further production. (ii) Soft drinks purchased…
Answer:- (i) Unemployment Allowances. It is a transfer Income as no services and goods are provided against the payment. In other words, no productive work is done against the payment received. (ii) Salary received by Rakesh from a company. It…
Ans – (a) Paper purchased by a publisher is an intermediate product as paper is used for further production during the same year. Intermediate Products are purchased by the firm and is either meant for further sale without modification or…