GK
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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GDP minus indirect taxes plus subsidies
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GNP minus depreciation allowances
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NNP plus depreciation allowances
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GDP minus subsidies plus indirect taxes
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Detailed explanation-1: -GDP at factor cost or basic prices are equal to market prices minus taxes on transaction of products plus subsidies on products. The sum of net value added in various economic activities is known as GDP at factor cost. SSC CPO SI Marks Released on 10th January 2023.
Detailed explanation-2: -∴ GDP at factor cost = GDP at market price + Subsidies-Indirect Tax.
Detailed explanation-3: -The factor cost does not include the taxes that are paid to the government since taxes are not directly involved in the production process and, therefore, are not a part of the direct production cost. However, subsidies received are included in the factor cost as subsidies are direct inputs into production.
Detailed explanation-4: -If economic subsidies are added to and indirect taxes are subtracted from the national income market prices, then it will be equal to National Income(NNP at factor cost). Formula: NNP(at market price)-Indirect tax + Subsidies = NNP(at factor cost)