Question

Increase in price of commodities due to increase in taxes assumes relevance in the estimation of $NN{P}_{MP}$ because:

• A. taxes are compulsory payments
• B. taxes are transfer payments
• C. taxes are paid out of the income of the households
• D. taxes cause a rise in market price of the commodities which otherwise would have been sold at a lower price

Answer 1

The correct option is D

taxes cause a rise in market price of the commodities which otherwise would have been sold at a lower price

Taxes cause a rise in the market prices of the commodities which otherwise would have been sold at a lower price.