Which one of the following is not a component of domestic factor income?

Question

KollegeApply · Accepted Answer

Value of intermediate goods Explanation: Domestic factor income includes: • Compensation of employees (wages, salaries, benefits) • Operating surplus (profit, rent, interest) • Mixed income of self-employed (income that is both labor and capital in nature) However, the value of intermediate goods is not a factor of income. It is a cost of production and not a payment to factors of production. Including it would result in double counting, which is avoided in national income accounting.

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