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Transfer Income is a receipt concept.

Final goods refer to those goods which are used either for Consumption or for Investment.

A normal resident of a country refers to an Individual or an Institution who ordinarily resides in the country and whose center of economic interest also lies in that country.

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…