If indirect taxes are ₹35 crore and subsidies are ₹60 crore, then what are net indirect taxes?
Answer and explanation
Correct answer: Negative ₹25 crore
The governing formula is NIT = indirect taxes − subsidies. Thus, NIT = ₹35 crore − ₹60 crore = −₹25 crore. Option C is correct because subsidies exceed taxes by ₹25 crore. ₹25 crore without a negative sign misses the direction of the difference, while ₹95 crore results from addition and does not measure net indirect taxes.
Frequently asked questions
What is the correct answer to this question?
Negative ₹25 crore
Why is this the correct answer?
The governing formula is NIT = indirect taxes − subsidies. Thus, NIT = ₹35 crore − ₹60 crore = −₹25 crore. Option C is correct because subsidies exceed taxes by ₹25 crore. ₹25 crore without a negative sign misses the direction of the difference, while ₹95 crore results from addition and does not measure 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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