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Consider the following statements regarding the concept of GDP at factor cost.
1. GDP at factor cost is gross domestic product at market prices, less net product taxes
2. Market prices also include product taxes and subsidies
3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a year
Which of these statements are correct?
- a)1 and 2 Only
- b)2 and 3 Only
- c)1 and 3 Only
- d)All of them
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements regarding the concept of GDP at fac...
- GDP at factor cost is gross domestic product at market prices, less net product taxes. Market prices are the prices as paid by the consumers. Market prices also include product taxes and subsidies.
- The term factor cost refers to the prices of products as received by the producers. Thus, factor cost is equal to market prices, minus net indirect taxes. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a year.
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Consider the following statements regarding the concept of GDP at fac...
Understanding GDP at Factor Cost
GDP at factor cost is an important economic measure that provides insight into the value produced within a country's economy. Let’s analyze each statement to understand why all are correct.
Statement 1: GDP at factor cost is gross domestic product at market prices, less net product taxes.
- This statement is accurate.
- GDP at factor cost adjusts GDP at market prices by subtracting net product taxes (taxes minus subsidies).
Statement 2: Market prices also include product taxes and subsidies.
- This statement is also correct.
- Market prices reflect the actual selling price of goods and services, which includes any applicable product taxes and subsidies. This means that the market price is often higher than the factor cost due to these taxes and subsidies.
Statement 3: GDP at factor cost measures the money value of output produced by firms within the domestic boundaries of a country in a year.
- This statement is true as well.
- GDP at factor cost accounts for the total value of goods and services produced within a country’s borders, focusing purely on production without the influence of taxes and subsidies.
Conclusion
All three statements accurately describe different aspects of GDP at factor cost. Therefore, the correct answer is option 'D', as all statements are indeed correct.
Understanding these concepts is crucial for assessments in economics, especially for competitive exams like UPSC, where grasping the nuances of economic indicators can significantly enhance analytical skills.
GDP at factor cost is an important economic measure that provides insight into the value produced within a country's economy. Let’s analyze each statement to understand why all are correct.
Statement 1: GDP at factor cost is gross domestic product at market prices, less net product taxes.
- This statement is accurate.
- GDP at factor cost adjusts GDP at market prices by subtracting net product taxes (taxes minus subsidies).
Statement 2: Market prices also include product taxes and subsidies.
- This statement is also correct.
- Market prices reflect the actual selling price of goods and services, which includes any applicable product taxes and subsidies. This means that the market price is often higher than the factor cost due to these taxes and subsidies.
Statement 3: GDP at factor cost measures the money value of output produced by firms within the domestic boundaries of a country in a year.
- This statement is true as well.
- GDP at factor cost accounts for the total value of goods and services produced within a country’s borders, focusing purely on production without the influence of taxes and subsidies.
Conclusion
All three statements accurately describe different aspects of GDP at factor cost. Therefore, the correct answer is option 'D', as all statements are indeed correct.
Understanding these concepts is crucial for assessments in economics, especially for competitive exams like UPSC, where grasping the nuances of economic indicators can significantly enhance analytical skills.
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Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer?
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Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer?.
Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
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Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements regarding the concept of GDP at factor cost. 1. GDP at factor cost is gross domestic product at market prices, less net product taxes2. Market prices also include product taxes and subsidies3. GDP at factor cost measures money value of output produced by the firms within the domestic boundaries of a country in a yearWhich of these statements are correct?a) 1 and 2 Onlyb) 2 and 3 Onlyc) 1 and 3 Onlyd) All of themCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice UPSC tests.
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