Question
Download Solution PDFWhat is the basic difference in the aggregates at market price and factor cost?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is Net indirect taxes. Key Points
- The basic difference in the aggregates at market price and factor cost is net indirect taxes.
- The taxes that a nation's government levies on the creation and sale of products and services are known as indirect taxes.
- One such tax is the GST (Goods and Services Tax).
Additional Information
- Depreciation:
- It is the decrease in the value of an asset over time due to wear and tear, obsolescence, or other factors.
- It is considered in the calculation of national income at factor cost, but not at market price.
- Indirect taxes:
- These are taxes levied on goods and services rather than on income or profits.
- Examples include GST, excise duty, customs duty, etc.
- They are included in the calculation of national income at market price, but not at factor cost.
- Direct taxes:
- These are taxes levied on the income or profits of individuals or companies.
- Examples include income tax, corporate tax, etc.
- They are not considered in the calculation of national income at either market price or factor cost.
Last updated on May 28, 2025
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