Which of the following is NOT included in domestic income?

Question

Question

This question was previously asked in

SSC CGL 2023 Tier-I Official Paper (Held On: 18 Jul 2023 Shift 4)

Answer 1

The correct answer is Income earned by the non-residents outside the country.Key Points

Domestic income, also known as Gross Domestic Product, is the total income earned by all sectors (households, firms, and the government) within the geographical boundaries of a country, irrespective of whether they are residents or non-residents.
However, income earned by non-residents outside the country is NOT included in the domestic income. Such income is part of the national income, not domestic income.

Additional Information

Gross Domestic Product (GDP): This is the total monetary value of all final goods and services produced within a country's borders over a specific period, typically a year.
Gross National Product (GNP): It is the total market value of all final goods and services produced by residents of a country in a given period of time.
- GNP = GDP + Net Factor Income from Abroad (NFIA)
- Here, Net Factor Income from Abroad = Income earned by domestic factors of production from rest of the world - Income earned by factors of production of rest of the world from the domestic economy
Net National Product (NNP) at Factor Cost or National Income (NI): This is the GNP minus depreciation.
- NNP or NI = GNP - Depreciation
Net Domestic Product (NDP): This is the GDP minus depreciation.
- NDP = GDP - Depreciation
Per Capita Income: It is a measure of the amount of money earned per person in a certain area.
- Per Capita Income = National Income / Total Population
Factor Income: It's the income that factors of production (land, labour, capital, and entrepreneurship) receive in return for their contribution to the production process.
Transfer Payments: These are payments made without the provision of goods or services in return. Examples are social security benefits, pensions, unemployment benefits, etc. Transfer payments are not included in the computation of national income as they do not involve productive activity.