Assertion (A): Domestic Income is equal to National Income in case of Closed Economy.
Assertion (A): Domestic Income is equal to National Income in case of Closed Economy.
Reason (R): Closed Economy has no economic relations with rest of the world.
Alternatives:
(a) Both Assertion (A) and Reason (R) are True and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A).
(c) Assertion (A) is True but Reason (R) is False.
(d) Assertion (A) is False but Reason (R) is True.
Anurag Pathak Changed status to publish December 7, 2023
Ans – (a)
Assertion (A) is true as Domestic Income is equal to National Income in case of closed economy.
Reason (R) is also true as closed economy has no economic relations with resto of the world
The Reason (R) is the correct explanation of Assertion (A) as in closed economy Net Factor Income from Abroad is Zero.
Thus National Income becomes equal to Domestic Income
For Example:-
Domestic Income = 200 Crores
NFIA = 0
National Income = Domestic Income + NFIA
National Income = ₹ 200 = ₹ 0
National Income = ₹ 200 Crores
Anurag Pathak Changed status to publish December 7, 2023
