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Fill in the Blank with Appropriate Alternatives Given Below Gdp (Fc) = Gdp (Mp) – __________ - Economics

MCQ
Fill in the Blanks

Fill in the blank with appropriate alternatives given below

GDP (FC) = GDP (MP)  __________ 

Options

  • factor cost

  • indirect taxes

  • depreciation

  • subsidy

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Solution

GDPFC = GDPMP   Net Indirect Taxes

Explanation:
Market price (MP) includes indirect taxes levied by the government on different goods and services and subsidies. These should be deducted from it to get the actual factor price. In other words,when the Gross Domestic Product (GDP) is expressed in terms of factor cost, the impact of subsidies and indirect taxes is not taken into consideration. Thus,
GDPFC = GDPMP Net Indirect Taxes
GDPFC = GDPMP (Indirect Taxes − Subsidies)

Concept: Concept of National Income
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 9 National Income
Exercise | Q 1.2 | Page 79
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