In Order to Calculate Net Domestic Income at Basic Prices,which

question 62

Multiple Choice

In order to calculate net domestic income at basic prices,which of the following adjustments must be made to gross domestic income at market prices?

• A)Both depreciation and Indirect taxes (net of subsidies)are deducted
• B)Both depreciation and Indirect taxes (net of subsidies)are added
• C)Indirect taxes (net of subsidies)is added and depreciation is deducted
• D)Indirect taxes (net of subsidies)is deducted and depreciation is added

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Definitions:

Weighted Average

A calculation that considers the varying weights of different items in a dataset, providing a measure that reflects their relative importance.

Free Cash Flow

The cash that a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Expansionary Gaps

Situations where actual GDP exceeds potential GDP, leading to inflationary pressure due to high demand.

Contractionary Gaps

Contractionary gaps occur when an economy’s actual output is lower than its potential output, often leading to unemployment and underutilized resources.