Question

The difference between GSDP at factor cost and GSDP at market price is primarily due to:

• A. Inflation and deflation
• B. Population growth
• C. The value of imports and exports
• D. Taxes and subsidies on production

Answer 1

Answer:

D. Taxes and subsidies on production

• The GSDP at factor cost represents the cost of the factors of production (land, labor, capital, etc.).

• To get the market price, indirect taxes on products are added and subsidies are subtracted.