Calculate the GDP at factor cost given in the following data.
GDP at market price = 600 crores
Consumption of fixed capital = 100 crores
Indirect taxes = 200 crores
Subsidies = 50 crores
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 350 crores.
To calculate GDP at factor cost, we need to adjust the GDP at market price for indirect taxes and subsidies, and then add back consumption of fixed capital.
GDP at factor cost = GDP at market price - Indirect taxes + Subsidies - Consumption of fixed capital
Given: GDP at market price = 600 crores Indirect taxes = 200 crores Subsidies = 50 crores Consumption of fixed capital = 100 crores
Let's plug in the values:
GDP at factor cost = 600 crores - 200 crores + 50 crores - 100 crores = 600 crores - 200 crores + 50 crores - 100 crores = 350 crores
So, the GDP at factor cost is 350 crores.