If both indirect taxes and subsidies decrease by ₹30 crore, what happens to net indirect taxes?
Answer and explanation
Correct answer: It will remain unchanged
Net indirect taxes equal indirect taxes minus subsidies. If both components decrease by the same ₹30 crore, the new difference is (taxes − 30) − (subsidies − 30) = taxes − subsidies. Hence, net indirect taxes remain unchanged, so option C is correct. The decrease in one component is exactly offset by the decrease in the other; no conclusion that the amount becomes zero is justified.
Frequently asked questions
What is the correct answer to this question?
It will remain unchanged
Why is this the correct answer?
Net indirect taxes equal indirect taxes minus subsidies. If both components decrease by the same ₹30 crore, the new difference is (taxes − 30) − (subsidies − 30) = taxes − subsidies. Hence, net indirect taxes remain unchanged, so option C is correct. The decrease in one component is exactly offset by the decrease in the other; no conclusion that the amount becomes zero is justified.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates.
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