Q4)In which type of economy domestic income is equal to national income?
Answers
Answer:
Domestic income will be equal to national income iN . Closed Economy.
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Answer:
In a closed economy, the national income is equal to the domestic income.
Explanation:
Domestic Income is the sum of total earnings from all the factors of production in a geographical area in a period of time, without calculating the exports and the imports.
National Income is the sum of the total earnings from all the factors of production in a geographical territory within a period of time, including exports and imports.
A closed economy is characterized by a country that is self-sufficient, thus does not engage in imports or exports, and consumes all that it produces. Since in this case, the net import and export shall be considered zero, thus, the domestic income shall be equal to the national income. Indis before the liberalization, privatization, and globalization laws was considered a closed economy.