net Domestic Product at factor cost is less than national income when and why?
Dear Student
Net Domestic Product at factor cost is less than national income ( Net National Product at Factor cost) when net factor income from abroad is positive.
Net national product at factor cost includes value of total production of every type of goods and objects in a nation,at a time period of whole one year and Net domestic product at factor cost means the total product consumed by a nation in a year.
Net factor income from abroad is added in Net Domestic Product at factor cost to get Net National Product at Factor cost.
NDPFC + Net factor income from abroad (NFIFA) = NNPFC (National income)
Regards
Net Domestic Product at factor cost is less than national income ( Net National Product at Factor cost) when net factor income from abroad is positive.
Net national product at factor cost includes value of total production of every type of goods and objects in a nation,at a time period of whole one year and Net domestic product at factor cost means the total product consumed by a nation in a year.
Net factor income from abroad is added in Net Domestic Product at factor cost to get Net National Product at Factor cost.
NDPFC + Net factor income from abroad (NFIFA) = NNPFC (National income)
Regards