If GDP at market price is 4200, NFIA is 100, depreciation is 250, and net indirect taxes are 350, what is NNP at factor cost?
Answer and explanation
Correct answer: 3700
To convert GDP at market price into NNP at factor cost, first add NFIA to obtain GNP, subtract depreciation to obtain NNP at market price, and subtract net indirect taxes to convert market price to factor cost. Thus NNPFC = 4200 + 100 − 250 − 350 = 3700. Therefore, option B is correct.
Frequently asked questions
What is the correct answer to this question?
3700
Why is this the correct answer?
To convert GDP at market price into NNP at factor cost, first add NFIA to obtain GNP, subtract depreciation to obtain NNP at market price, and subtract net indirect taxes to convert market price to factor cost. Thus NNPFC = 4200 + 100 − 250 − 350 = 3700. Therefore, option B is correct.
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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