Question

In \[NI=R+W+I+P+MI+(X-M)+(R-P)\], \[R-P\] represents:

Options

• Retained earnings minus pension

• Royalty minus provident fund

• Net receipts from abroad

• Rent minus profits within the domestic economy

Answer 1

\[R-P\] represents net receipts from abroad in this formula. It means net income from abroad, namely factor income received from the rest of the world minus factor income paid abroad.