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What has to be subtracted from the value of output (at market prices) of an enterprise in order to…

Subtracting intermediate consumption (A) from the value of output at market prices gives Gross Value Added at Market Prices (\(GVA_{MP}\)). Subtracting consumption of fixed…

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What has to be subtracted from the value of output (at market prices) of an enterprise in order to arrive at Net Value Added at Factor Cost ?
(A) Intermediate Consumption
(B) Consumption of Fixed Capital
(C) Net Indirect Taxes

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Answer and explanation

Correct answer D

Subtracting intermediate consumption (A) from the value of output at market prices gives Gross Value Added at Market Prices (GVAMPGVA_{MP}). Subtracting consumption of fixed capital or depreciation (B) converts gross value added to Net Value Added at Market Prices (NVAMPNVA_{MP}), and subtracting net indirect taxes (C) converts market prices to factor cost (NVAFCNVA_{FC}). Thus, all three items (A), (B) and (C) must be subtracted.

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