If GDP at market price is ₹1,250 crore and net indirect taxes are ₹90 crore, what is GDP at factor cost?
Answer and explanation
Correct answer: ₹1,160 crore
The governing conversion is GDP at Factor Cost = GDP at Market Price − Net Indirect Taxes. Substituting the given values gives ₹1,250 crore − ₹90 crore = ₹1,160 crore. Hence option B is correct. Adding ₹90 crore would move from factor cost to market price, producing ₹1,340 crore, so option D reverses the required direction. The other values do not follow the formula.
Frequently asked questions
What is the correct answer to this question?
₹1,160 crore
Why is this the correct answer?
The governing conversion is GDP at Factor Cost = GDP at Market Price − Net Indirect Taxes. Substituting the given values gives ₹1,250 crore − ₹90 crore = ₹1,160 crore. Hence option B is correct. Adding ₹90 crore would move from factor cost to market price, producing ₹1,340 crore, so option D reverses the required direction. The other values do not follow the formula.
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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