Question

When is domestic factor income higher than national income?

Answer 1

Explanation:

Domestic Factor Income will be less than the National Income when Factor income earned from Abroad is more than Factor income paid Abroad. Domestic Factor Income, on the other hand, will be greater than the National Income when Factor income paid Abroad is more than the Factor income earned from Abroad.

Answer 2

Factor income is the sum total of factor incomes generated by residents of a country, no matter where this income is generated either with in the domestic territory or in rest of the world. It does not include net factor income from abroad.