In which type of economy, domestic income is equal to national income?
In which type of economy, domestic income is equal to national income?
(a) Open Economy
(b) Closed Economy
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Anurag Pathak Changed status to publish December 7, 2023
Ans – (b)
Explanation
In a closed economy, there is no economic activity with the rest of the world. Thus Net factor income from abroad is zero.
National Income = Domestic Income + NFIA
National Income = Domestic Income
Anurag Pathak Changed status to publish December 7, 2023
