Question : Statement 1: National income at factor cost is obtained by adding indirect taxes to the net national product.
Statement 2: Indirect taxes are taxes levied on the production and sale of goods and services.
Option 1: Statement 1 is true, and Statement 2 is false.
Option 2: Statement 1 is false, and Statement 2 is true.
Option 3: Both Statement 1 and Statement 2 are true.
Option 4: Both Statement 1 and Statement 2 are false.
Correct Answer: Statement 1 is true, and Statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and Statement 2 is false.
Statement 1 is true. National income at factor cost is obtained by adding indirect taxes to the net national product. It represents the income earned by the factors of production (such as labor and capital) in the economy.
Statement 2 is false. Indirect taxes are indeed taxes levied on the production and sale of goods and services. However, they are not added to the net national product to obtain national income at factor cost. Instead, indirect taxes are deducted from the gross national product (GNP) to arrive at the net national product (NNP).
Therefore, Statement 1 is true, and Statement 2 is false.
Question : Statement 1: Net National Product (NNP) represents the value of final goods and services produced by a country's residents during a specific period.
Statement 2: NNP is obtained by deducting depreciation from Gross National Product (GNP).
Question : Statement 1: Goods and Services Tax (GST) is a direct tax.
Statement 2: GST is levied on goods and services.
Question : Statement 1: Gross Domestic Product (GDP) is a measure of the total output of final goods and services produced within a country's borders.
Statement 2: GDP excludes the value of intermediate goods and services used in production.
Question : Statement 1: Net Domestic Product (NDP) is obtained by deducting depreciation from Gross Domestic Product (GDP).
Statement 2: Depreciation represents the loss in value of capital goods over time.
Question : Statement 1: Gross Domestic Product (GDP) measures the value of all final goods and services produced within a country's borders.
Statement 2: Gross National Product (GNP) measures the value of all final goods and services produced by a country's residents,
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile