Question : Calculate the GDP at Factor Cost given in the following data. GDP at market price = 600 crores Consumption of fixed capital = 100 crores Indirect taxes = 200 crores Subsidies = 50 crores.
Option 1: 350 crores
Option 2: 850 crores
Option 3: 950 crores
Option 4: 450 crores
Correct Answer: 350 crores
Solution : The correct option is 350 crores.
Gross domestic product (GDP) at factor cost is calculated by subtracting the consumption of fixed capital from GDP at market price and then adjusting for indirect taxes and subsidies. The formula is as follows:
GDP at Factor Cost = GDP at Market Price − Consumption of Fixed Capital + Subsidies − Indirect Taxes
GDP at factor cost = 600 crores − 100 crores + 50 crores − 200 crores
GDP at factor cost = 350 crores.
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