Economic Awareness - Sectors of Indian Economy
Which of the following is NOT included in GDP at factor cost?
Which of the following is NOT included in GDP at factor cost?
easy Q2 of 15
Step-by-Step Solution
Step 1: Understand GDP at factor cost
GDP at factor cost includes payments to factors of production such as wages, rent, and subsidies but excludes indirect taxes.Step 2: Identify the excluded component
Indirect taxes are excluded from GDP at factor cost because they are not payments to factors but taxes levied by the government.Final Answer:
Indirect Taxes → Option AQuick Check:
Indirect taxes excluded from FC ✅
Quick Trick: Remember subsidies included, indirect taxes excluded in factor cost.
Common Mistakes:
- Mistaking indirect taxes as part of factor cost.
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