Interest and dividend proceeds received by investors on foreign investment is

A. transfer payment

B. factor income

C. merchandise payment

D. service payment

Answer: Option B

Solution(By Examveda Team)

Interest and dividend proceeds received by investors on foreign investment is factor income. Factor income is income received from the factors of production: the inputs used in the production of goods or services in order to make an economic profit. Factor income on the use of land is called rent, income generated from labor is called wages, and income generated from capital is called profit.