GDP at factor cost may be derived from u

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Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

GDP at factor cost may be derived from using one of the following formula. Choose the correct.

Options:

$GDP_{FC}=GDP_{MP}-NFIA$

$GDP_{FC}=GDP_{MP}-NIT$

$GDP_{FC}=GDP_{MP}-Depr$

$GDP_{FC}=GDP_{MP}+NFIA$

Correct Answer:

$GDP_{FC}=GDP_{MP}-NIT$

Explanation:

The correct answer is option (2) : $GDP_{FC}=GDP_{MP}-NIT$

The formula subtracts net indirect taxes from GDP at market prices to obtain GDP at factor cost.