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Question : What is the basic difference in the aggregates at market price and factor cost?

Option 1: Depreciation

Option 2: Indirect taxes

Option 3: Net indirect taxes

Option 4: Direct taxes


Team Careers360 7th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

Correct Answer: Net indirect taxes


Solution : The correct answer is Net indirect taxes.

Prices in the market are established beyond the production boundary, incorporating net indirect taxes and depreciation. The factor cost, on the other hand, encompasses the cost of goods and services within the production boundary, excluding depreciation and net indirect taxes. Both market prices (MP) and factor cost (FC) account for the same indirect taxes and subsidies.

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