What is Domestic Territory of a country class 12?

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Domestic Territory is also called Economic territory. A countries national & domestic income is calculated keeping in mind the production activities are done within or outside the domestic territory of a country.

Define Economic (Domestic) Territory of a country in Economics

The United Nations System of National Accounts, briefly called SNA, defines economic (or domestic) territory as that geographic territory administered by a government within which persons, goods, and capital circulate freely.

The statement ‘administered by a government is very significant in the definition. It includes and excludes the following areas.

What is included in the domestic territory of a country?

  1. Political frontiers including territorial waters and airspace.
  2. Embassy, consulates, military bases located abroad
  3. Ships, aircraft, etc. operated by the residents between two or more countries
  4. Fishing vessels, oil, and natural rigs, etc. operated by residents in the international waters or other areas over which country enjoys exclusive rights or jurisdiction.

What is excluded in the domestic Territory of a country?

  1. Foreign Embassy, consulates, military bases located within the geographical territory of a country.
  2. Ships, aircraft, etc. operated by non-residents within the geographical territory of a country.
  3. Fishing vessels, oil, and natural rigs, etc. operated by non-residents within the geographical territory of a country.

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Note:- Multi-National Company (MNC) comes under the domestic territory of a country where they operate.

For Example, An American company branch situated in India would come under the domestic territory of India itself.

An Indian company branch situated in Japan would come under the domestic territory of Japan itself.

Question and Answers of Domestic Territory

Which of the following are covered under the domestic territory of India?

1 An Indian Company in London.

Ans. Indian Company is an MNC for country London. It would come under the economic territory of London as it is administered by government of London itself.

2 Microsoft Office in India.

Ans. Microsoft is an MNC for country India. It would comer under the domestic territory of India it is administered by Indian government.

3 Company In India own by a Japanese.

Ans. It would come under the domestic territory of India. Right the same reason as above.

4. Office of Reliance Industries in New York.

Ans. It would come under the domestic territory of USA.

5. Branch of Foreign Bank in India.

Ans. It would come under the Domestic Territory of India.

6. Indian Embassy in Japan.

Ans. It would come under the domestic territory of Japan itself.

7. Branch of State Bank of India in China.

Ans. It would come under the territory of China.

8. Russian Embassy in India.

Ans. Embassy of Russia would come under the economic territory of Russia as it is administered by government of Russia.

9. Tata rented its building to google in America.

Building of Tata would come under the economic territory of America as it is administered by American government not by Indian one.

Further Reading:-

S.NTopics
1.What is Macroeconomics
2.What are Goods in economics
3.What are Consumption Goods
4.What are capital goods
5.What are intermediate Goods
6.What is intermediate consumption
7.What are final Goods
8.What is Final Consumption
9.What is investment in economics
10. What is stock and flow
11.What are transfer payments
12.What is circular flow of income
13.What is Domestic Territory of a Country
14.What is normal resident of a country
15.Nominal GDP and Real GDP
S.NTopics
1.What is GDP Deflator
2.What are externalities in economics
3.Limitations of GDP as a measure of welfare
S.NTopics
1.Items to be included in National income
2.Items to be included in Domestic Income
S.NTopics
1.National Income and Related Aggregates, formula, Definition, process
2.Value added Method, formula, Definition, process
3.Income Method, formula, Definition, process
4.Expenditure Method, formula, Definition, process
5.
S.NTopics
1.150+ Numerical of Value Added Method
2.150+ Numerical of Income Method
3.150+ Numerical of Expenditure Method
4. 150+ Numerical of National Income and related aggregates
S.NTopics
1.250+ MCQs of National Income
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Anurag Pathak
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

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