Which aggregate measures the money value of output produced by the firms within the domestic boundaries of a country in a year, at the prices received by the producers?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → GDP at factor cost
Output within the domestic boundaries makes it a domestic aggregate. Prices received by producers are factor cost. Together: GDP at factor cost.
NCERT (2026-27): “Table 2.4: Basic National Income Aggregates … Market prices are the prices as paid by the consumers Market prices also include product taxes and subsides. The term factor cost refers to the prices of products as received by the producers. Thus, factor cost is equal to market prices, minus net indirect taxes. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a year.” |