Net factor income from abroad is used to differetiate national income from domestic income. Simply, put nfia is the difference between the factor earned from abroad by normal residents of a country and the factor income earned by nonresidents(foreigners) in the domestic territory of that country.
The normal residents of a country earn factor income not only within the domestic territory of a country but outside it also. Income from outside can be earned mainly in two ways, namely (1) income from work and (2) income from property and enterpreneurship.
Nfia=factor income earned from abroad by residents - factor income of non residents in domestic territory
components of net factor income from abroad:
(1)net compensation of employees
(2)net income from property and enterpreneurship(rent,interest,profit)
(3)net retained earning of resident companies abroad
The normal residents of a country earn factor income not only within the domestic territory of a country but outside it also. Income from outside can be earned mainly in two ways, namely (1) income from work and (2) income from property and enterpreneurship.
Nfia=factor income earned from abroad by residents - factor income of non residents in domestic territory
components of net factor income from abroad:
(1)net compensation of employees
(2)net income from property and enterpreneurship(rent,interest,profit)
(3)net retained earning of resident companies abroad
