Question

Answer the following question.
Explain 'mixed-income of self-employed' and give an example.

Answer 1

Mixed-income of self-employed refers to the incomes of the self-employed persons who use their own land, labour, capital, and entrepreneurship to produce various goods and services. In such cases, factor incomes (rent, wages, profit, and capital) cannot be separately estimated. Hence, the name mixed-income.

The aggregate of all the factor incomes generated within the domestic territory during an accounting year gives an estimate of NDP_FC or Domestic Income.

Having estimated the domestic income (NDP_FC), we can estimate national income (NNP_FC) in the following manner.

NDP_FC + Net Factor Income from Abroad (NFIA) = NNP_FC or National Income