If net indirect taxes fall from ₹100 crore to negative ₹20 crore, what is the total change?
Answer and explanation
Correct answer: Decrease of ₹120 crore
The governing idea is that a change equals final value minus initial value. Here, final NIT = −₹20 crore and initial NIT = ₹100 crore. Therefore, change = (−20) − 100 = −₹120 crore. The negative sign indicates a decrease, so the correct answer is option C: a decrease of ₹120 crore. Option A would result from ignoring that the final value is negative; option D gives the wrong direction.
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What is the correct answer to this question?
Decrease of ₹120 crore
Why is this the correct answer?
The governing idea is that a change equals final value minus initial value. Here, final NIT = −₹20 crore and initial NIT = ₹100 crore. Therefore, change = (−20) − 100 = −₹120 crore. The negative sign indicates a decrease, so the correct answer is option C: a decrease of ₹120 crore. Option A would result from ignoring that the final value is negative; option D gives the wrong direction.
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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