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 If indirect taxes in an economy are increased, then which of the following can occur ?
1. GDP at factor cost increases
2. GDP at factor cost decreases
3. GDP at market price increases
4. GDP at market price decreases
Select the correct answer using the codes given below.
  • a)
    1 only
  • b)
    2 and 3 only
  • c)
    3 only
  • d)
    4 only
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
If indirect taxes in an economy are increased, then which of the follo...
 Answer & Explanation
c) 3 only. GDP (market price) = GDP ( factor cost) + indirect taxes – subisdies. This equation makes it clear that any increase in indirect taxes will increase the GDP at market prices.
 
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If indirect taxes in an economy are increased, then which of the following can occur ?1. GDP at factor cost increases2. GDP at factor cost decreases3. GDP at market price increases4. GDP at market price decreasesSelect the correct answer using the codes given below.a)1 onlyb)2 and 3 onlyc)3 onlyd)4 onlyCorrect answer is option 'C'. Can you explain this answer?
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If indirect taxes in an economy are increased, then which of the following can occur ?1. GDP at factor cost increases2. GDP at factor cost decreases3. GDP at market price increases4. GDP at market price decreasesSelect the correct answer using the codes given below.a)1 onlyb)2 and 3 onlyc)3 onlyd)4 onlyCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about If indirect taxes in an economy are increased, then which of the following can occur ?1. GDP at factor cost increases2. GDP at factor cost decreases3. GDP at market price increases4. GDP at market price decreasesSelect the correct answer using the codes given below.a)1 onlyb)2 and 3 onlyc)3 onlyd)4 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for If indirect taxes in an economy are increased, then which of the following can occur ?1. GDP at factor cost increases2. GDP at factor cost decreases3. GDP at market price increases4. GDP at market price decreasesSelect the correct answer using the codes given below.a)1 onlyb)2 and 3 onlyc)3 onlyd)4 onlyCorrect answer is option 'C'. Can you explain this answer?.
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