If indirect taxes increase by ₹20 crore and subsidies increase by ₹5 crore, what is the change in net indirect taxes?
Answer and explanation
Correct answer: Increase of ₹15 crore
Net indirect taxes are defined as indirect taxes minus subsidies. The change is therefore change in taxes − change in subsidies = ₹20 crore − ₹5 crore = +₹15 crore. Net indirect taxes increase by ₹15 crore, so option A is correct. The ₹25 crore choices incorrectly add both changes or reverse the resulting sign; a subsidy increase reduces net indirect taxes.
Frequently asked questions
What is the correct answer to this question?
Increase of ₹15 crore
Why is this the correct answer?
Net indirect taxes are defined as indirect taxes minus subsidies. The change is therefore change in taxes − change in subsidies = ₹20 crore − ₹5 crore = +₹15 crore. Net indirect taxes increase by ₹15 crore, so option A is correct. The ₹25 crore choices incorrectly add both changes or reverse the resulting sign; a subsidy increase reduces 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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