If indirect taxes are ₹950 crore and net indirect taxes are ₹600 crore, what will be the subsidy?
Answer and explanation
Correct answer: ₹350 crore
The governing formula is Net Indirect Taxes = Indirect Taxes − Subsidies. Rearranging, Subsidies = Indirect Taxes − Net Indirect Taxes. Therefore, subsidy = ₹950 crore − ₹600 crore = ₹350 crore. Option B is correct. If the subsidy were ₹250 crore, net indirect taxes would be ₹700 crore, so option A does not satisfy the given data.
Frequently asked questions
What is the correct answer to this question?
₹350 crore
Why is this the correct answer?
The governing formula is Net Indirect Taxes = Indirect Taxes − Subsidies. Rearranging, Subsidies = Indirect Taxes − Net Indirect Taxes. Therefore, subsidy = ₹950 crore − ₹600 crore = ₹350 crore. Option B is correct. If the subsidy were ₹250 crore, net indirect taxes would be ₹700 crore, so option A does not satisfy the given data.
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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