If GDPMP is ₹1,800 crore and GDPFC is ₹1,650 crore, what is the value of net indirect taxes (NIT)?
Answer and explanation
Correct answer: ₹150 crore
The relationship between the two valuations is GDPMP = GDPFC + NIT. Rearranging gives NIT = GDPMP − GDPFC. Substituting the figures, NIT = ₹1,800 crore − ₹1,650 crore = ₹150 crore. The answer is positive because market price exceeds factor cost by the amount of net indirect taxes.
Frequently asked questions
What is the correct answer to this question?
₹150 crore
Why is this the correct answer?
The relationship between the two valuations is GDPMP = GDPFC + NIT. Rearranging gives NIT = GDPMP − GDPFC. Substituting the figures, NIT = ₹1,800 crore − ₹1,650 crore = ₹150 crore. The answer is positive because market price exceeds factor cost by the amount of net indirect taxes.
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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