Aggregates related to national income - Market price and factor cost

The difference between market price and factor cost equals net indirect taxes. Hence, net indirect taxes = 40,000 − 37,600 = ₹2,400 crore. Using net indirect taxes = indirect taxes − subsidies, subsidies = 3,100 − 2,400 = ₹700 crore. Therefore option B is correct. ₹2,400 crore is the net tax, not the subsidy, and the other options do not balance the conversion.

Initially, net indirect taxes are 21,000 − 20,100 = ₹900 crore. When indirect taxes increase by ₹150 crore and subsidies do not change, net indirect taxes also increase by ₹150 crore, becoming ₹1,050 crore. The new market-price NDP is therefore 20,100 + 1,050 = ₹21,150 crore. Option C is correct; the unchanged original value ignores the tax rise.

First calculate net indirect taxes: 1,800 − 500 = ₹1,300 crore. Convert GDP to NDP by subtracting depreciation, and convert market price to factor cost by subtracting net indirect taxes: NDP at factor cost = 32,000 − 2,200 − 1,300 = ₹28,500 crore. National income adds net factor income from abroad: 28,500 − 400 = ₹28,100 crore. Option A is correct.

Because market price is ₹75 crore below factor cost, net indirect taxes must be −₹75 crore. Using net indirect taxes = indirect taxes − subsidies, we get −75 = 40 − subsidies. Therefore, subsidies = 40 + 75 = ₹115 crore. Option C is correct. The negative net tax indicates that subsidies exceed indirect taxes; ignoring this sign would produce the wrong answers.

Subsidies exceeding indirect taxes by ₹120 crore means net indirect taxes = indirect taxes − subsidies = −₹120 crore. The conversion formula is output at factor cost = output at market price − net indirect taxes. Hence, factor-cost output = 3,000 − (−120) = ₹3,120 crore. Option C is correct. The negative sign raises factor-cost value above market-price value; subtracting ₹120 would incorrectly give option A.

The initial net indirect taxes are ₹180 crore. Their change is the increase in indirect taxes minus the increase in subsidies: 50 − 20 = ₹30 crore. Thus, new net indirect taxes = 180 + 30 = ₹210 crore. Converting GNP at factor cost to market price gives 4,200 + 210 = ₹4,410 crore. Option C is correct; adding both increases fully would ignore the subsidy adjustment.

The difference between market price and factor cost equals net indirect taxes, which is indirect taxes minus subsidies. A ₹30 crore fall in taxes changes NIT by −₹30 crore, while a ₹10 crore fall in subsidies changes NIT by +₹10 crore because less subsidy is deducted. The net change is −₹20 crore. Hence the difference becomes ₹160 − ₹20 = ₹140 crore, so option B is correct.

Since Market Price = Factor Cost + NIT, a constant market price means any fall in net indirect taxes must be offset by an equal rise in factor cost. NIT = taxes − subsidies. Taxes fall by ₹10 crore and subsidies rise by ₹25 crore, so NIT falls by ₹10 + ₹25 = ₹35 crore. Therefore factor cost rises by ₹35 crore. Option B is correct; ₹15 crore ignores one of the two changes.

Let indirect taxes be T. The statement says subsidies = 80% of T, so ₹160 = 0.8T. Hence T = ₹160 ÷ 0.8 = ₹200 crore. Net indirect taxes equal indirect taxes minus subsidies: ₹200 − ₹160 = ₹40 crore. Option D is the gross indirect-tax amount, while C is the subsidy itself; option B correctly gives the net amount.

Use MP = FC + NIT, so the reduced NIT equals ₹6,000 − ₹5,850 = ₹150 crore. A 25% fall means the remaining amount is 75% of the original amount. If the original NIT is x, then 0.75x = 150, giving x = 150 ÷ 0.75 = ₹200 crore. Hence option C is correct. ₹150 crore is the reduced amount, not the original amount; the other values do not satisfy the percentage relation.

From MP = FC + NIT, the increased NIT is ₹4,480 − ₹4,000 = ₹480 crore. A 20% rise makes the new amount 120% of the original. Let the original NIT be x: 1.20x = 480, so x = 480 ÷ 1.20 = ₹400 crore. Therefore, option B is correct. ₹480 crore is the amount after the rise, whereas the question asks for the amount before the rise.

The governing formula is MP = FC + NIT. Since NIT is 15% of factor cost x, MP = x + 0.15x = 1.15x. Substituting MP = ₹2,300 crore gives 1.15x = 2,300, so x = 2,300 ÷ 1.15 = ₹2,000 crore. Therefore, option B is correct. Option C reflects an incorrect percentage treatment, while option D adds 15% to market price instead of solving for factor cost.

Use FC = MP − NIT, or equivalently MP = FC + NIT. Here NIT = −0.08MP = −0.08x. Therefore, 2,700 = x − (−0.08x) = 1.08x. Solving gives x = 2,700 ÷ 1.08 = ₹2,500 crore, so option C is correct. The negative tax increases factor cost above market price; treating 8% as positive would incorrectly produce a lower value.

The governing conversion is GDP at factor cost = GDP at market price − net indirect taxes. Substituting the given values gives ₹21,500 crore − ₹1,350 crore = ₹20,150 crore. Therefore option B is correct. Option C incorrectly makes no adjustment, option D adds the tax instead of subtracting it, and option A subtracts an incorrect amount. No depreciation is involved because the question asks for GDP, not NDP.

To move from factor cost to market price, add net indirect taxes. Net indirect taxes equal indirect taxes minus subsidies: ₹1,250 − ₹350 = ₹900 crore. Therefore NDP at market price = ₹14,800 + ₹900 = ₹15,700 crore. Option C is correct. Adding gross taxes without subtracting subsidies gives ₹16,050 crore, while subtracting the net amount or making no adjustment gives other incorrect results.

The relevant identity is net indirect taxes = market price − factor cost. If factor cost is ₹420 crore higher than market price, then market price − factor cost = −₹420 crore. Thus net indirect taxes are minus ₹420 crore, so option B is correct. A positive ₹420 crore would describe the reverse relationship. The negative result indicates that subsidies exceed indirect taxes by ₹420 crore.

Net indirect taxes equal indirect taxes minus subsidies. An increase of ₹180 crore in taxes raises net indirect taxes by ₹180 crore. A fall of ₹60 crore in subsidies also raises net indirect taxes by ₹60 crore because less is being subtracted. Hence the total change is 180 + 60 = ₹240 crore increase. Option C is correct; subtracting the two changes would miss the effect of the subsidy decline.

The difference between market price and factor cost is net indirect taxes: ₹24,000 − ₹22,600 = ₹1,400 crore. Since net indirect taxes = indirect taxes − subsidies, indirect taxes = net indirect taxes + subsidies = ₹1,400 + ₹500 = ₹1,900 crore. Therefore option C is correct. ₹1,400 crore is only the net amount, while ₹900 crore incorrectly subtracts subsidies again.

Use the identity net indirect taxes = indirect taxes − subsidies. Rearranging gives subsidies = indirect taxes − net indirect taxes. Substitution yields subsidies = 1,100 − (−200) = ₹1,300 crore. Therefore option C is correct. The negative net value means subsidies exceed indirect taxes; ₹900 crore results from incorrectly treating −₹200 as a positive amount, and ₹1,100 crore ignores the net adjustment.

National income equals NNP at factor cost. The conversion is NNP at market price = NNP at factor cost + net indirect taxes. Since net indirect taxes are negative ₹250 crore, the calculation is ₹13,400 + (−₹250) = ₹13,150 crore. Therefore, option B is correct. A negative tax means a net subsidy effect, so market price is lower than factor cost; simply retaining ₹13,400 or adding ₹250 would be incorrect.

Two adjustments are required. First, deduct depreciation from GDP to obtain NDP; second, deduct net indirect taxes to convert market price into factor cost. Thus, NDP at factor cost = ₹28,000 − ₹2,300 − ₹1,600 = ₹24,100 crore. Option B is correct. ₹25,700 crore deducts only depreciation, while ₹26,400 crore deducts only taxes; ₹23,100 crore subtracts too much.

To move from NDP at factor cost to GDP at market price, add depreciation to change net into gross and add net indirect taxes to change factor cost into market price. Therefore, GDP at market price = ₹19,500 + ₹1,500 + ₹950 = ₹21,950 crore. Option C is correct. Options A and B omit one of the required adjustments, while D adds an incorrect extra amount.

Net indirect taxes equal the difference between output measured at market price and output measured at factor cost. Percentage growth rates alone cannot determine the change in that difference because the rates apply to potentially different initial bases. The initial values of both aggregates are therefore required. Option B is correct. The 3 percentage-point gap is not itself the change in taxes, and either taxes or subsidies alone is insufficient.

Net indirect taxes are measured as market price minus factor cost. In the initial year, the amount was ₹12,000 − ₹11,000 = ₹1,000 crore. In the next year, it was ₹13,500 − ₹12,200 = ₹1,300 crore. Therefore, the change was ₹1,300 − ₹1,000 = ₹300 crore increase, making option C correct. Comparing only market prices or only factor costs would not give the tax change.

The governing relation is Market Price = Factor Cost + Net Indirect Taxes, or NIT = MP − FC. If factor cost exceeds market price by ₹380 crore, then MP − FC = −₹380 crore. Thus net indirect taxes are negative, which can occur only when subsidies exceed indirect taxes by ₹380 crore. Direct taxes and depreciation do not determine this conversion.