GDP at factor cost is equal to GDP at market price minus indirect taxes plus __________.

depreciation

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direct taxes

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foreign investments

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subsidies

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Solution

The correct option is A subsidies
$G D P_{f c} = G D P_{m p} - I n d i r e c t t a x e s + S u b s i d i e s$ .
This is because market prices is reached by adding indirect taxes to the cost of production, i.e., factors of production, and deduction of subsidies provided, if any.

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