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IAI Q31 Net Indirect taxes

D

dextar

Member
Following table contains some national income related facts about an economy

Wages 235
Rent 110
Interest 140
Profit 135
Consumption 345
Government Spending (excluding Transfer Payments) 215
Investment 330
Exports 95
Imports 115
Net factor Income from abroad 120
Depreciation 50

Calculate value of Net Indirect Taxes (Indirect Taxes – Subsidies).

My point is wages+rent+interest +profit will gives GVA at basic prices and C+G+I+NX would give GDP at market prices. Substracting both these should give the answer.
But the solution says wages+rent+interest +profit =Net domestic product at factor prices so they subtracted depreciation to get net indirect taxes. Can anyone explain why wages+rent+interest +profit =net domestic product at factor prices rather than GDP at factor prices?
 
I agree with you. GDP at market prices (using the expenditure method) is 870. GDP at factor cost or basic prices (using the income method) is 620. So therefore net indirect taxes should be 250.
 
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