If indirect taxes decrease by ₹12 crore and subsidies decrease by ₹7 crore, what is the change in net indirect taxes?
Answer and explanation
Correct answer: Decrease of ₹5 crore
Use net indirect taxes = indirect taxes − subsidies. The change in net indirect taxes is (−₹12) − (−₹7) = −₹12 + ₹7 = −₹5 crore. Thus, net indirect taxes decrease by ₹5 crore, making option B correct. The ₹19 crore choices incorrectly add the magnitudes of both decreases, and option A reverses the sign of the net change.
Frequently asked questions
What is the correct answer to this question?
Decrease of ₹5 crore
Why is this the correct answer?
Use net indirect taxes = indirect taxes − subsidies. The change in net indirect taxes is (−₹12) − (−₹7) = −₹12 + ₹7 = −₹5 crore. Thus, net indirect taxes decrease by ₹5 crore, making option B correct. The ₹19 crore choices incorrectly add the magnitudes of both decreases, and option A reverses the sign of the net change.
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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