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    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?
    A $750 billion Correct Answer Incorrect Answer
    B $850 billion Correct Answer Incorrect Answer
    C $1,150 billion Correct Answer Incorrect Answer
    D $1,250 billion Correct Answer Incorrect Answer

    Solution

    GDP at factor cost = GDP at market prices − Indirect taxes + Subsidies GDP at factor cost = 1000 − 200 + 50 = 850 GDP at factor cost=1000−200+50=850 Correct answer: b) $850 billion

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