In an economy, gross value added is 700 and net taxes on products are 80. What is GDP at market price?
Answer and explanation
Correct answer: 780
When gross value added is measured at basic prices, GDP at market price is obtained by adding net taxes on products. The calculation is GDP at market price = GVA + net taxes on products = 700 + 80 = 780. Hence, option C is correct. The taxes are added because market prices include these net product taxes.
Frequently asked questions
What is the correct answer to this question?
780
Why is this the correct answer?
When gross value added is measured at basic prices, GDP at market price is obtained by adding net taxes on products. The calculation is GDP at market price = GVA + net taxes on products = 700 + 80 = 780. Hence, option C is correct. The taxes are added because market prices include these net product taxes.
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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