Question

Distinguish between net export and net factor income from abroad.

Distinguish between Net Factor Income from Abroad (NFIA) and Net Exports (X − M).

Distinguish between net exports and net income from abroad.

Answer 1

Sr. No.	Net export (X − M)	Net factor income from abroad (NFIA)
1.	The difference between a nation’s total imports (M) and exports (X) is known as net exports.	The difference between foreign residents’ income and their income is known as the NFIA.
2.	Net exports = X − M	NFIA = Factor Income from Abroad – Factor Income Paid to Abroad
3.	Includes internationally traded goods and services.	Includes foreign profits, rent, interest, and wages.
4.	It calculates the GDP contribution of international trade.	GDP is converted into GNP (Gross National Product) with its support.
5.	Related to the exchange of goods and services.	Related to transactions involving income from the factors of production.
6.	Indicates if a nation has a trade deficit or surplus.	Displays the income coming in or going out as a result of factor services.
7.	Example: Exporting cars, importing oil.	Example: Wages of Indians working abroad, profits from Indian companies abroad.