1.

What is meant by factor income to abroad ? State its components.

Answer»


Solution :FACTOR income to abroad refers to the 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 workers working within the economic territory.
(ii) Income from property (rent , interest) and entrepreneurship (dividend) paid to the REST of the world .
(iii) RETAINED earnings of enterprises OWNED by non-residents within the domestic territory.
{Note : It must be NOTED that components of 'Factor income to abroad' are asked and not of 'Net factor income from abroad'}


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