Aggregates related to national income - Market price and factor cost

The governing idea is a percentage increase from the stated base. Factor cost is 6% greater than the market-price output, so first calculate 6% of ₹5,600 crore: 0.06 × 5,600 = ₹336 crore. Add this increase to the original amount: ₹5,600 + ₹336 = ₹5,936 crore. Thus option C is correct. Option B ignores the increase, while A decreases the value and D applies an incorrect 10% increase.

Use the identity GNP at market price = GNP at factor cost + indirect taxes − subsidies. The difference between the two GNP measures is ₹3,850 − ₹3,620 = ₹230 crore, which is net indirect taxes. Since net indirect taxes = indirect taxes − subsidies, subsidies = ₹310 − ₹230 = ₹80 crore. Therefore option B is correct; ₹230 crore is the net tax, not the subsidy.

The governing formula is market price = factor cost + indirect tax − subsidy. The indirect tax equals 15% of ₹800, or 0.15 × 800 = ₹120. Substituting the values gives market price = ₹800 + ₹120 − ₹25 = ₹895. Therefore option A is correct. Adding the subsidy instead of subtracting it would give an incorrect result, and the other options do not follow the stated formula.

Net indirect taxes equal the difference between market price and factor cost. First calculate the tax amount: 12% of ₹2,500 crore = 0.12 × 2,500 = ₹300 crore. Therefore, factor cost = market price − net indirect taxes = ₹2,500 − ₹300 = ₹2,200 crore. Option B is correct. Option C would subtract only ₹200 crore, while the larger values incorrectly add or fail to deduct the tax.

The relationship is market price = factor cost + net indirect taxes. Net indirect taxes are 18% of ₹3,000 crore: 0.18 × 3,000 = ₹540 crore. Adding this to factor cost gives market price = ₹3,000 + ₹540 = ₹3,540 crore. Hence option C is correct. Option B reflects a 12% addition, option A an incorrect 6% addition, and option D uses a 20% addition rather than the stated 18%.

Net indirect taxes are calculated as indirect taxes minus subsidies. Subsidies equal 30% of ₹450 crore, so subsidies = 0.30 × 450 = ₹135 crore. Thus net indirect taxes = ₹450 − ₹135 = ₹315 crore. Option C is correct. ₹135 crore is only the subsidy amount, while ₹585 crore incorrectly adds the two amounts; ₹285 crore results from an incorrect subtraction.

The governing concept is the distinction between subsidies and net indirect taxes. Since ₹210 crore represents 70% of indirect taxes, indirect taxes = ₹210 ÷ 0.70 = ₹300 crore. Net indirect taxes equal indirect taxes minus subsidies, so ₹300 − ₹210 = ₹90 crore. Therefore option B is correct. ₹210 crore is the subsidy itself, ₹300 crore is gross indirect tax, and the other values do not satisfy the stated percentages.

The governing relation is market price = factor cost + net indirect taxes. In the ratio 13:12, the 12 parts representing factor cost equal ₹4,800 crore, so one part is ₹4,800 ÷ 12 = ₹400 crore. Market price exceeds factor cost by one part, because 13 − 12 = 1. Therefore net indirect taxes are ₹400 crore, making option B correct; ₹5,200 crore is the market price itself.

The governing concept is reverse percentage calculation. If market price is 112% of factor cost, then 3,360 = 1.12 × factor cost. Therefore, factor cost = 3,360 ÷ 1.12 = 3,360 × 100/112 = ₹3,000 crore. Option D incorrectly calculates 112% of ₹3,360 instead of recovering the original amount, while the other values do not satisfy the stated percentage relationship.

Use the reverse-percentage rule: when factor cost is 115% of market price, 3,450 = 1.15 × market price. Thus market price = 3,450 ÷ 1.15 = 3,450 × 100/115 = ₹3,000 crore. Because factor cost exceeds market price, net indirect taxes are negative, which is economically consistent with subsidies exceeding indirect taxes. Option D takes 115% of the given amount and reverses the relationship.

Net indirect taxes equal indirect taxes minus subsidies. Let indirect taxes and subsidies be 7x and 3x respectively. Then NIT = 7x − 3x = 4x = ₹240 crore, so x = ₹60 crore. Indirect taxes = 7x = 7 × 60 = ₹420 crore. Thus option C is correct; ₹240 crore is the net amount, not the tax component itself.

Because subsidies exceed indirect taxes, NIT = Indirect Taxes − Subsidies is negative. Let taxes = 4x and subsidies = 7x. Then 4x − 7x = −3x = −₹150 crore, so x = ₹50 crore. Subsidies = 7x = 7 × 50 = ₹350 crore. Option D is correct; using the absolute net amount as subsidies would ignore the given 4:7 ratio.

Initially, factor cost exceeded market price by ₹70 crore, so NIT = Market Price − Factor Cost = −₹70 crore. An increase of ₹45 crore changes NIT to −70 + 45 = −₹25 crore. A negative NIT of ₹25 crore means market price remains ₹25 crore below factor cost. Hence option B is correct; it does not become positive or reach equality.

The governing relation is MP − FC = net indirect taxes, and net indirect taxes equal indirect taxes minus subsidies. Since MP equals FC, the net indirect tax is zero. Therefore, indirect taxes − ₹175 crore = 0, so indirect taxes must be ₹175 crore. Option C is correct; zero would ignore the subsidy, while the other amounts would create a non-zero difference between MP and FC.

Use two standard conversions. First, subtract depreciation from GDP at market price to obtain NDP at market price: ₹4,800 − ₹350 = ₹4,450 crore. Next, subtract net indirect taxes to move from market price to factor cost: ₹4,450 − ₹275 = ₹4,175 crore. Thus option C is correct. Option B stops after depreciation, whereas option D incorrectly adds the tax adjustment.

To convert GNP at factor cost into NNP at market price, first remove depreciation and then add net indirect taxes. NNP at factor cost = ₹5,300 − ₹420 = ₹4,880 crore. NNP at market price = ₹4,880 + ₹230 = ₹5,110 crore. Therefore option C is correct. Option B omits the market-price adjustment, while option D adds depreciation instead of subtracting it.

First convert GDP to NDP at market price by deducting depreciation: ₹6,200 − ₹500 = ₹5,700 crore. The relation NDP at factor cost = NDP at market price − net indirect taxes must then be applied. Because net indirect taxes are −₹150 crore, subtracting them means adding ₹150: ₹5,700 − (−₹150) = ₹5,850 crore. Hence option C is correct.

The difference between market price and factor cost gives net indirect taxes: ₹27,000 − ₹25,300 = ₹1,700 crore. Since net indirect taxes = indirect taxes − subsidies, indirect taxes = net indirect taxes + subsidies = ₹1,700 + ₹550 = ₹2,250 crore. Therefore option C is correct. Option B is only the net amount, not the gross indirect tax.

Use net indirect taxes = indirect taxes − subsidies. Let subsidies be S. Then −₹250 = ₹1,300 − S. Rearranging gives S = ₹1,300 + ₹250 = ₹1,550 crore. Hence option C is correct. The negative net figure shows that subsidies exceed indirect taxes by ₹250 crore; ₹1,050 crore would instead produce a positive net tax of ₹250 crore.

The governing conversion is GNP at market price = GNP at factor cost + net indirect taxes. Market price includes the effect of indirect taxes after subsidies, whereas factor cost measures factor payments. Therefore, GNP at market price = ₹20,600 + ₹1,200 = ₹21,800 crore. Option A subtracts the adjustment, option B ignores it, and option D adds an incorrect amount.

National income is NNP at factor cost. To convert NNP at market price to NNP at factor cost, subtract net indirect taxes. Net indirect taxes = indirect taxes − subsidies = ₹1,300 − ₹350 = ₹950 crore. Hence, national income = ₹18,900 − ₹950 = ₹17,950 crore. Option A uses an incorrect adjustment, while C ignores taxes and subsidies and D adds them.

National income is NNP at factor cost. The relationship is NNP at market price = NNP at factor cost + net indirect taxes. Here the net indirect tax is −₹320 crore, so the calculation is ₹15,700 + (−₹320) = ₹15,380 crore. The negative value means subsidies exceed indirect taxes and therefore lowers market price relative to factor cost. Thus option B is correct.

Use the two required adjustments: NDP at factor cost = GDP at market price − depreciation − net indirect taxes. First, subtract depreciation to remove the gross component: ₹31,000 − ₹2,500 = ₹28,500 crore. Then subtract net indirect taxes to change market price to factor cost: ₹28,500 − ₹1,750 = ₹26,750 crore. Therefore option B is correct; option C stops after only one adjustment.

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. Thus GDP at market price = ₹21,800 + ₹1,700 + ₹1,100 = ₹24,600 crore. Option B adds depreciation but omits taxes; option D adds too much. Hence option C is correct.

Net indirect taxes equal the difference between market price and factor cost. In the initial year, the gap was ₹15,000 − ₹13,800 = ₹1,200 crore. In the next year, it was ₹16,800 − ₹15,200 = ₹1,600 crore. The change was therefore ₹1,600 − ₹1,200 = ₹400 crore increase. Option D confuses the new level with the change, so option C is correct.