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    Question

    Identify the correct formula which states the relation

    between GDP and GVA.
    A GDP (MP) = ∑ GVA (Basic Prices) + Product Taxes – Product Subsidies Correct Answer Incorrect Answer
    B GDP (MP) = ∑ GVA (Basic Prices) - Product Taxes + Product Subsidies Correct Answer Incorrect Answer
    C GDP (Basic Prices) = ∑ GVA (Market Price) + Product Taxes – Product Subsidies Correct Answer Incorrect Answer
    D GDP (Basic Prices) = ∑ GVA (Market Price) - Product Taxes + Product Subsidies Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    GDP (MP) = ∑ GVA (Basic Prices) + Product Taxes – Product Subsidies We can also write above formula as GDP (MP) = ∑ GVA (Basic Prices) + Net Product Taxes. Here, it’s important to understand the concepts of Factor Cost, Basic Prices, Market Price, Product Taxes and Production taxes. Watch vide again and make your own notes.

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