Initially market price was ₹4,200 crore and factor cost was ₹3,880 crore. Later market price rose by ₹180 crore and factor cost rose by ₹70 crore. What was the change in net indirect taxes?
Answer and explanation
Correct answer: Increase of ₹110 crore
Net indirect taxes equal market price minus factor cost. Initially, NIT = 4,200 − 3,880 = ₹320 crore. Later market price is ₹4,380 crore and factor cost is ₹3,950 crore, so NIT = 4,380 − 3,950 = ₹430 crore. The change is 430 − 320 = ₹110 crore increase. Option B is correct; the change depends on the difference between both increases, 180 − 70.
Frequently asked questions
What is the correct answer to this question?
Increase of ₹110 crore
Why is this the correct answer?
Net indirect taxes equal market price minus factor cost. Initially, NIT = 4,200 − 3,880 = ₹320 crore. Later market price is ₹4,380 crore and factor cost is ₹3,950 crore, so NIT = 4,380 − 3,950 = ₹430 crore. The change is 430 − 320 = ₹110 crore increase. Option B is correct; the change depends on the difference between both increases, 180 − 70.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
