GDP at market prices is obtained from Gross Value Added at basic prices by doing what?

Subtracting product taxes and adding product subsidiesCorrect answerYour answerAdding product taxes and subtracting product subsidiesCorrect answerYour answerAdding depreciationCorrect answerYour answerSubtracting net factor income from abroadCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

GVA at basic prices is what producers receive; GDP at market prices is what buyers pay.
The difference is the product taxes that are added to the price and the product subsidies that are taken off it.
So GDP equals GVA plus product taxes minus product subsidies.

Worth noting

GVA is the better guide to what the producing sectors actually did, because a change in tax rates moves GDP without anything being produced differently.

Concept: How GDP at market prices relates to GVA at basic prices
Typical timeTypical: 45 s
Your timeYours: —

The rule this testsNational income and official statistics

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Ten questions from Indian Economy & Institutions, at your own pace.

GDP at market prices is obtained from Gross Value Added at basic prices by doing what?

Explanation