Assertion (A): Domestic income is NDP at factor cost.
Reason (R): NDP at factor cost is the total of the factor incomes earned within the domestic territory.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

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Correct answer: A

Factor cost = what factors earn; net = after depreciation; domestic = within the territory.
R explains why NDP at FC is called domestic income.

Concept: Domestic income
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsMarket price, factor cost and basic prices

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Assertion (A): Domestic income is NDP at factor cost.Reason (R): NDP at factor cost is the total of the factor incomes earned within the domestic territory.

Explanation

Assertion (A): Domestic income is NDP at factor cost.
Reason (R): NDP at factor cost is the total of the factor incomes earned within the domestic territory.