If national income is ₹3,800 crore and net indirect taxes are negative ₹90 crore, what is NNP at market price?
Answer and explanation
Correct answer: ₹3,710 crore
National income is NNP at factor cost. The relation is NNP at market price = NNP at factor cost + net indirect taxes. Substituting the signed value gives ₹3,800 + (−₹90) = ₹3,710 crore. Thus B is correct. The answer ₹3,890 crore incorrectly treats the negative tax as positive; ₹3,800 ignores the adjustment, and ₹3,620 subtracts ₹180 instead of ₹90.
Frequently asked questions
What is the correct answer to this question?
₹3,710 crore
Why is this the correct answer?
National income is NNP at factor cost. The relation is NNP at market price = NNP at factor cost + net indirect taxes. Substituting the signed value gives ₹3,800 + (−₹90) = ₹3,710 crore. Thus B is correct. The answer ₹3,890 crore incorrectly treats the negative tax as positive; ₹3,800 ignores the adjustment, and ₹3,620 subtracts ₹180 instead of ₹90.
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.
