If indirect taxes are ₹300 crore and subsidies are ₹50 crore, what are net indirect taxes?
Answer and explanation
Correct answer: ₹250 crore
The governing concept is net indirect taxes, which equal indirect taxes minus subsidies. Thus, net indirect taxes = ₹300 crore − ₹50 crore = ₹250 crore. Therefore, option B is correct. Option C is only the gross tax amount, while option D adds the subsidy and option A subtracts an incorrect amount. Net indirect taxes are used when converting between market price and factor cost.
Frequently asked questions
What is the correct answer to this question?
₹250 crore
Why is this the correct answer?
The governing concept is net indirect taxes, which equal indirect taxes minus subsidies. Thus, net indirect taxes = ₹300 crore − ₹50 crore = ₹250 crore. Therefore, option B is correct. Option C is only the gross tax amount, while option D adds the subsidy and option A subtracts an incorrect amount. Net indirect taxes are used when converting between market price and factor cost.
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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