Domestic Territory/Economic Territory
Domestic Territory or Economic Territory is an essential concept of national income accounting, which simply means the political frontiers of a country. However, the term Domestic Territory is used in a wider sense when it comes to national income accounting.
Along with Political Frontiers, Domestic Territory also consists of the following items:
1. Embassies, military establishments, and consulates of a country located abroad. Any embassy, military establishment, and consulate of a country that has an office or branch abroad are also included under the domestic territory of a country. Here, a consulate is a building or an office used by an officer. also known as consul, commissioned by the government of a country to reside in a foreign country for the promotion of the interest of the country to which he/she belongs. For example, Indian Embassy in the USA is a part of the domestic territory of India.
2. Ships and aircraft owned and operated by normal residents between two or more countries. If a normal resident of a country owns and operates ships and aircraft between two or more countries, then those ships and aircraft will be included in the domestic territory of the country. For example, airplanes operated by Air India between Japan and Russia are a part of the domestic territory of India.
3. Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international waters where they have exclusive rights of operation. If a resident of a country operates fishing vessels, oil and natural gas rigs, and floating platforms in the international waters, it will be included in the domestic territory of that country. However, the resident must have rights of operation in the international waters. For example, if an Indian Fisherman operates a fishing boat in the international waters of the Pacific Ocean, it will be considered a part of the domestic territory of India.
However, the following are not included in the Domestic Territory of a country:
1. Embassies, military establishments, and consulates of a foreign country are not included in the domestic territory of a country. For example, USA Embassy in India is not a part of the domestic territory of India, instead, it will be a part of the domestic territory of the USA.
2. Any International organisation such as WHO, UNO, etc., located within the geographical boundaries of a country will not be a part of the domestic territory of that country.
Practice Question 1
Which of the following is a part of the domestic territory of India?
1. Indian Embassy in Pakistan.
2. An Indian organisation in Japan.
3. Office of HUL in Africa.
4. A company owned by an American in India.
5. USA Embassy in India.
Answer
1. Yes, it is a part of the domestic territory of India.
2. No, it is not a part of the domestic territory of India.
3. No, it is not a part of the domestic territory of India.
4. Yes, it is a part of the domestic territory of India.
5. No, it is not a part of the domestic territory of India.
Basic Concepts of Macroeconomics
Macroeconomics is a part of economics that focuses on how a general economy, the market, or different systems that operate on a large scale, behaves. Macroeconomics concentrates on phenomena like inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment.
“Macroeconomics is that part of economics which studies the overall averages and aggregates of the system”. – KE Boulding