direct purchases by non residents in domestic market is deducted while calculating National income from expenditure method. why ?
Sonakshi,
As the definition of national income itself says that it is the aggregate of all factor incomes earned by those factors of production that are normal residents of a country both within the domestic territory as well as abroad. Therefore, we deduct the direct purchases by non residents in domestic market while calculating national income.
As the definition of national income itself says that it is the aggregate of all factor incomes earned by those factors of production that are normal residents of a country both within the domestic territory as well as abroad. Therefore, we deduct the direct purchases by non residents in domestic market while calculating national income.