‘Export receipts are not a part of Net Factor Income from abroad.’ Why?
Solution:
The statement is absolutely correct because all the goods and services which are exported are produced by the producers in the domestic economy. For instance, Indian tea, coffee, jute goods, etc. which are purchased by foreigners are produced in India and are called India's export. Since exported goods and services are produced in the domestic territory of a country, therefore, export of goods and services is a part of gross domestic product (GDP). Export receipts are not 'net factor income from abroad as they are the revenue of the firms from the sale of their products.
The statement is absolutely correct because all the goods and services which are exported are produced by the producers in the domestic economy. For instance, Indian tea, coffee, jute goods, etc. which are purchased by foreigners are produced in India and are called India's export. Since exported goods and services are produced in the domestic territory of a country, therefore, export of goods and services is a part of gross domestic product (GDP). Export receipts are not 'net factor income from abroad as they are the revenue of the firms from the sale of their products.