NNP at factor cost is ₹1,850 crore and net indirect taxes are ₹125 crore. What is NNP at market price?
Answer and explanation
Correct answer: ₹1,975 crore
The governing conversion for NNP is NNP at Market Price = NNP at Factor Cost + Net Indirect Taxes. Therefore, NNP at market price = ₹1,850 crore + ₹125 crore = ₹1,975 crore, making option C correct. ₹1,850 crore is the starting factor-cost figure, while ₹1,725 crore subtracts the tax and ₹2,100 crore adds too much. Depreciation is irrelevant because both values are already NNP.
Frequently asked questions
What is the correct answer to this question?
₹1,975 crore
Why is this the correct answer?
The governing conversion for NNP is NNP at Market Price = NNP at Factor Cost + Net Indirect Taxes. Therefore, NNP at market price = ₹1,850 crore + ₹125 crore = ₹1,975 crore, making option C correct. ₹1,850 crore is the starting factor-cost figure, while ₹1,725 crore subtracts the tax and ₹2,100 crore adds too much. Depreciation is irrelevant because both values are already NNP.
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 - NNP.
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