Question:
To arrive at the value of Gross Value Added at Factor Cost (GVA\(_{FC}\)), .......... must be ................. to/from Gross Value Added at Market Price (GVA\(_{MP}\)).
To arrive at the value of Gross Value Added at Factor Cost (GVA\(_{FC}\)), .......... must be ................. to/from Gross Value Added at Market Price (GVA\(_{MP}\)).
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Remember, to move from Gross Value Added at Market Price to Factor Cost, you subtract depreciation and add net indirect taxes.
Updated On: Jul 1, 2025
- depreciation, added
- depreciation, subtracted
- Net Indirect Taxes, added
- Net Indirect Taxes, subtracted
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The Correct Option is B
Solution and Explanation
To arrive at the value of GVA at Factor Cost, depreciation must be subtracted from GVA at Market Price (GVA\(_{MP}\)). Depreciation represents the reduction in the value of capital over time, and this must be accounted for when calculating the GVA at Factor Cost.
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