Economic Awareness - Sectors of Indian Economy
Which of the following components is subtracted from GDP at market price to arrive at GDP at factor cost?
Which of the following components is subtracted from GDP at market price to arrive at GDP at factor cost?
easy Q3 of 15
Step-by-Step Solution
Step 1: Understand the relationship
GDP at factor cost is derived from GDP at market price by removing indirect taxes and adding subsidies.Step 2: Identify the component subtracted
Indirect taxes are subtracted from GDP at market price to get GDP at factor cost.Final Answer:
Indirect Taxes → Option DQuick Check:
Subtract IT from MP for FC ✅
Quick Trick: Subtract indirect taxes to move from market price to factor cost.
Common Mistakes:
- Confusing direct taxes or subsidies as subtracted components.
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