chapter 2 Flashcards
(51 cards)
domestic territory
the territory administered by the government within which persons, goods and capital circulate freely.
domestic territory includes
- ships and aircrafts owned and operated by the Indian residents.
- fishing vessels, oil and natural gas rigs
- embassies, consulates and military establishments of a country
domestic territory does not include
- international organisations
- embassies, consulates and military establishments of a foregin country
normal residents
normal residents of a country refers to an individual or institution ordinarily resides in the country and whose centre of economic interest also lies in that country.
not included in normal residents
- employees of international organisations
- international organisations
- foreign tourist and visitors
- crew members of foreign vessels, commercial travels and seasonal workers
- border worker
- foreign staff of embassies officials, diplomats and members of armed forces
citizenship vs residentship
citizenship
two ways to get
1. by birth
2. apply and be allowed by Indian law
residentship
1. economic concept
2. economic interest and lies more than one year
factor income
factor income refers to income received by factors of production for rending factor services in the production process.
transfer income
transfer income refers to income received without rendering any productive services in return.
which income is included in national income
factor income
goods are dived to
final and intermediate
final goods
final goods refers to those goods which are used either for consumption or for investment
expenditure on final goods=
consumption expenditure+ investment expenditure
intermediate goods
intermediate goods refers to those goods which are used either for resale or future product in the same year.
important points about intermediate goods
- they are not ready for use by their final users.
- they are generally purchased by one production unit from another production unit.
- unit of intermediate goods is merged with the value of final goods
- durable goods purchased by the government for military purpose are involved under the category of intermediate goods as they are used to produce defence services and not for market sales
- they have ‘derived demand’ as their demand depends on the demand of final good.
production boundary
the productive boundary in the line around the productive sector.
the goods inside the production boundary
intermediate good
the goods outside the production boundary
final good
factor income vs transfer income
factor income
meaning-factor income refers to income received by factors of production for rending factor services in the production process.
nature- it is included in both domestic and national income.
concept- it is an earring concept
received- it is is received by factors of production.
transfer income
meaning- transfer income refers to income received without rendering any productive services in return.
nature- it is not included in both domestic and national income.
concept- it is an receipt concept
received- it is is generally received by households and government.
final goods vs intermediate goods
intermediate goods
meaning - intermediate goods refers to those goods which are used either for resale or future product in the same year.
nature- they are not included in national income and domestic income.
value addition- they are not ready to use
final goods
meaning -final goods refers to those goods which are used either for consumption or for investment
nature- they are included in national income and domestic income.
value addition- they are ready to use
final goods are further divided into
consumption and capital goods
consumption goods
those goods which satisfy the want of the consumers directly.
consumption goods are further divided to
- durable goods
- semi-durable goods
- non-durable goods
- services
durable goods
those goods which can be used again and again over a considerable period of time
semi-durable goods
goods which can be used for a limited period of time
