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Class 12EconomicsNational Income and Related AggregatesAggregates related to national income - Market price and factor costEasyLevel 35
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If GDP at factor cost is ₹7,200 crore and net indirect taxes are ₹500 crore, what will be GDP at market price?

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Answer and explanation

Correct answer: ₹7,700 crore

To convert GDP at factor cost into GDP at market price, add net indirect taxes. The formula is GDP at Market Price = GDP at Factor Cost + Net Indirect Taxes. Therefore, ₹7,200 crore + ₹500 crore = ₹7,700 crore, so option C is correct. ₹6,700 crore subtracts the tax, while ₹7,200 crore leaves the conversion incomplete.

Related tags

GdpMarket PriceFactor CostNet Indirect TaxesNumerical EconomicsAggregates Related To National Income Market Price And Factor CostNational Income And Related AggregatesEconomics

Frequently asked questions

What is the correct answer to this question?

₹7,700 crore

Why is this the correct answer?

To convert GDP at factor cost into GDP at market price, add net indirect taxes. The formula is GDP at Market Price = GDP at Factor Cost + Net Indirect Taxes. Therefore, ₹7,200 crore + ₹500 crore = ₹7,700 crore, so option C is correct. ₹6,700 crore subtracts the tax, while ₹7,200 crore leaves the conversion incomplete.

Which subject and chapter does this question cover?

This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - Market price and factor cost.

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10 more MCQs
  1. 1What adjustment is made to move from market price to factor cost?
  2. 2Net indirect taxes are equal to what?
  3. 3If indirect tax is 30 and subsidy is 10, what is net indirect tax?
  4. 4If domestic product at factor cost is 500 and net factor income from abroad is 20, what is national income?
  5. 5If domestic product is 400 and net factor income from abroad is −10, what is national income?
  6. 6What is the effect of a subsidy on the relationship between market price and factor cost?
  7. 7If indirect tax is 45 and subsidy is 15, what will be the net indirect tax?
  8. 8If value added at market price is ₹600 and net indirect tax is ₹50, what will be value added at factor cost?
  9. 9What should be done to obtain net value added at factor cost from net value added at market price?
  10. 10If net domestic product at market price is ₹4,600 and net indirect taxes are ₹300, what is net domestic product at factor cost?
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