If net indirect taxes are negative ₹55 crore and subsidies are ₹155 crore, what are the indirect taxes?
Answer and explanation
Correct answer: ₹100 crore
Apply the definition: net indirect taxes = indirect taxes − subsidies. Let indirect taxes be T. Then T − ₹155 = −₹55, so T = ₹155 − ₹55 = ₹100 crore. Therefore option B is correct. Option A confuses the magnitude of the negative net amount with the tax amount; C is the subsidy itself, and D incorrectly adds the two figures instead of using the signed equation.
Frequently asked questions
What is the correct answer to this question?
₹100 crore
Why is this the correct answer?
Apply the definition: net indirect taxes = indirect taxes − subsidies. Let indirect taxes be T. Then T − ₹155 = −₹55, so T = ₹155 − ₹55 = ₹100 crore. Therefore option B is correct. Option A confuses the magnitude of the negative net amount with the tax amount; C is the subsidy itself, and D incorrectly adds the two figures instead of using the signed equation.
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.
