Net foreign factor income NFIA of India will change if 1 More remittances are receive...........

Economic Affairs Growth and Indicators

Download Solution PDF

Net foreign factor income (NFIA) of India will change if

1. More remittances are received from Indian workers in Gulf countries

2. The returns of foreign investors on investment in India start rising

Which of the above is/are correct?

1 only

2 only

Both 1 and 2

None of the above

छोटे Courses बड़े Results

Master Growth and Indicators

Prepare through Micro-courses

Try Now

Explanation:

Justification: NFIA 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.

The NFIA level is generally not substantial in most nations, since factor payments earned by their citizens and those paid to foreigners more or less offset each other.

Statement 1: If gulf workers send more remittances, India’s NFIA will rise. This is because labour is a ‘factor’ of production which has been deployed in a foreign nation.

Statement 2: Capital (machinery, investment) is another factor of production. The income coming from this factor becomes a part of NFIA, if either foreign investors invest in India or Indian investors invest abroad.