If indirect taxes are five times subsidies and net indirect taxes are ₹1,200 crore, what will be the amount of subsidies?
Answer and explanation
Correct answer: ₹300 करोड़
Let subsidies be ₹x crore. Since indirect taxes are five times subsidies, indirect taxes equal ₹5x crore. By definition, net indirect taxes = indirect taxes − subsidies, so 1,200 = 5x − x = 4x. Thus x = 1,200 ÷ 4 = ₹300 crore. Option B is correct. For example, ₹300 crore of subsidies and ₹1,500 crore of taxes produce net taxes of ₹1,200 crore.
Frequently asked questions
What is the correct answer to this question?
₹300 करोड़
Why is this the correct answer?
Let subsidies be ₹x crore. Since indirect taxes are five times subsidies, indirect taxes equal ₹5x crore. By definition, net indirect taxes = indirect taxes − subsidies, so 1,200 = 5x − x = 4x. Thus x = 1,200 ÷ 4 = ₹300 crore. Option B is correct. For example, ₹300 crore of subsidies and ₹1,500 crore of taxes produce net taxes of ₹1,200 crore.
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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