Question

Under which situation is the value of the national product more than the domestic product?

Answer 1

The value of the national product becomes more than the domestic product when the Net Factor Income from Abroad (NFIA) is positive. This happens when the income earned by the residents of a country from abroad is greater than the income earned by foreigners within the domestic territory. In such cases, the excess income received from abroad is added to the domestic product, increasing the value of the national product. This situation is represented by the following formula:

National Product = Domestic Product + Net Factor Income from Abroad (NFIA)