Distinguish between Factor Income and Transfer Income. Distinguish between Domestic Income and National Income.

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Distinguish between Factor Income and Transfer Income:

Factor Income: Income received in exchange for rendering factor services (land, labor, capital, entrepreneurship). It is earned through productive activity. Example: Wages, rent, interest, profit.

Transfer Income: Income received without rendering any productive service. It is a one-way payment. Example: Pensions, scholarships, gifts, donations.

Distinguish between Domestic Income and National Income:

Domestic Income (NDP_FC): Income generated within the domestic territory of a country. It includes income from all producers within the country's borders.

National Income (NNP_FC): Income earned by normal residents of a country, regardless of where it is produced. It includes Net Factor Income from Abroad (NFIA).