Question

Q40. If a country does not have the concept of indirect taxes and subsides then

• A. a) GDP at market cost and GDP at factor cost will be same
• B. b) GDP at market cost and GDP at factor cost will be different
• C. c) GDP at market cost will be Greater
• D. d) GDP at factor cost will be greater

Answer 1

The correct option is A

a) GDP at market cost and GDP at factor cost will be same

ans ; A
The difference between GDP at markert cost and GDP at factor cost is because GDP at
market cost includes indirect taxes and excludes subsidies whereas GDP at factor cost
excludes indirect taxes and includes subsidies . If there was no concept of indirect taxes and
subsidies than both of them would be same