In context of calculations of National Income consider the following statements about lsquo Net Fact...........

Economic Affairs Growth and Indicators

In context of calculations of National Income consider the following statements about ‘Net Factor Income from Abroad (NFIA)’ or ‘Net Foreign Factor Income (NFFI)’ and identify the correct one/s.

1. It is the difference between the aggregate amount that a country's citizens and companies earn abroad, and the aggregate amount that foreign citizens and overseas companies earn in that country.

2. For India, NFIA is always positive due to high amount of incomes generated by Indian nationals and India based firms abroad.

Select the correct answer using codes given below

1 only

2 only

All of the above

None of the above

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Explanation:

Both the statements are incorrect.
The net foreign factor income (NFFI) is the difference between a nation’s gross national product (GNP) and gross domestic product (GDP).
Net foreign factor income (NFFI) is the difference between the aggregate amount that a country’s citizens and companies earn abroad, and the aggregate amount that foreign citizens and overseas companies earn in that country.
In mathematical terms, NFFI = GNP - GDP.