If NDP at market price is ₹15,600 crore and NDP at factor cost is ₹15,950 crore what will be net indirect taxes?
Answer and explanation
Correct answer: Negative ₹350 crore
For the same aggregate, NDP at market price = NDP at factor cost + net indirect taxes. Rearranging gives net indirect taxes = NDP at market price − NDP at factor cost. Thus, ₹15,600 − ₹15,950 = −₹350 crore. Option B is correct. The negative value means subsidies exceed indirect taxes by ₹350 crore. A positive ₹350 crore would incorrectly reverse the subtraction order.
Frequently asked questions
What is the correct answer to this question?
Negative ₹350 crore
Why is this the correct answer?
For the same aggregate, NDP at market price = NDP at factor cost + net indirect taxes. Rearranging gives net indirect taxes = NDP at market price − NDP at factor cost. Thus, ₹15,600 − ₹15,950 = −₹350 crore. Option B is correct. The negative value means subsidies exceed indirect taxes by ₹350 crore. A positive ₹350 crore would incorrectly reverse the subtraction order.
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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