If GDP at factor cost is ₹7,500 crore and market price is 9% higher than factor cost, what are net indirect taxes?
Answer and explanation
Correct answer: ₹675 crore
The governing concept is that GDP at market price minus GDP at factor cost equals net indirect taxes. Since market price is 9% above factor cost, the difference is 9% of ₹7,500 crore: 0.09 × 7,500 = ₹675 crore. Therefore option B is correct. ₹8,175 crore is the GDP at market price, while the other numerical choices do not equal the required difference.
Frequently asked questions
What is the correct answer to this question?
₹675 crore
Why is this the correct answer?
The governing concept is that GDP at market price minus GDP at factor cost equals net indirect taxes. Since market price is 9% above factor cost, the difference is 9% of ₹7,500 crore: 0.09 × 7,500 = ₹675 crore. Therefore option B is correct. ₹8,175 crore is the GDP at market price, while the other numerical choices do not equal the required difference.
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.
