Question
If the Gross Domestic Product (GDP) at market prices is
$1,000 billion, the indirect taxes are $200 billion, and subsidies are $50 billion, what is the Gross Domestic Product at factor cost?Solution
GDP at factor cost = GDP at market prices â Indirect taxes + Subsidies GDP at factor cost = 1000 â 200 + 50 = 850 GDP at factor cost=1000â200+50=850 Correct answer: b) $850 billion
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