Depreciation, net production taxes and net product taxes are all positive. Arrange the following in increasing order of value:
(A) GVA at basic prices
(B) GDP at market prices
(C) NDP at factor cost
(D) GVA at factor cost
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (C), (D), (A), (B)
Start from the smallest measure and add one item at a time.
(C) NDP at factor cost — It leaves out depreciation and all net taxes, so it is the smallest.
(D) GVA at factor cost — NDP at factor cost plus depreciation.
(A) GVA at basic prices — GVA at factor cost plus net production taxes.
(B) GDP at market prices — GVA at basic prices plus net product taxes.
NCERT (2026-27): “2.2.4 Factor Cost, Basic Prices and Market Prices … As stated above, now the CSO releases GVA at basic prices. Thus, it includes the net production taxes but not net product taxes. In order to arrive at the GDP (at market prices) we need to add net product taxes to GVA at basic prices. Thus, Glossary: “Net Domestic Product (NDP) – Aggregate value of goods and services produced within the domestic territory of a country which does not include the depreciation of capital stock.” |