To convert GDP at market prices into factor cost we need to __________.

deduct indirect taxes and added subsidies from it

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subtract subsidies from it and add indirect taxes to it

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deduct indirect taxes and subsidies from it

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deduct weight of inflation for the period from it

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Solution

The correct option is A deduct indirect taxes and added subsidies from it
GDP at factor cost = GDP at market price - Indirect taxes + Subsidies
Higher the indirect taxes or subsidies, greater the gap between GDP at factor cost and market prices.

Suggest Corrections

Similar questions

Market price includes the impact of indirect taxes, but not of subsidies.

Particulars	Rs. in crores
(i) National Income (ii) Consumption of Fixed Capital (iii) Factor income from abroad (iv) Indirect Taxes (v) Subsidies (vi) Factor income to abroad	6,700 180 100 130 70 150

G D P

R s . 1, 100

R s . 100

-

R s .150

R s . 850

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