If NDP at market price is ₹7,300 crore and net indirect taxes are ₹450 crore, what is NDP at factor cost?
Answer and explanation
Correct answer: ₹6,850 crore
The governing conversion is NDP at factor cost = NDP at market price − net indirect taxes. Therefore, NDP at factor cost = ₹7,300 crore − ₹450 crore = ₹6,850 crore. Option B is correct because taxes included in the market-price measure are removed to obtain factor cost. Option C merely repeats the market-price value, while A and D use incorrect subtraction or addition.
Frequently asked questions
What is the correct answer to this question?
₹6,850 crore
Why is this the correct answer?
The governing conversion is NDP at factor cost = NDP at market price − net indirect taxes. Therefore, NDP at factor cost = ₹7,300 crore − ₹450 crore = ₹6,850 crore. Option B is correct because taxes included in the market-price measure are removed to obtain factor cost. Option C merely repeats the market-price value, while A and D use incorrect subtraction or addition.
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 - NDP.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
