Question : Suppose the GDP at a market price of a country in a particular year was INR 1,100 crore. Net factor income from abroad was INR 100 crore. The value of indirect taxes - subsidies were INR 150 crore and the national income was INR 850 crore. Calculate the aggregate value of depreciation.
Option 1: 400
Option 2: 200
Option 3: 500
Option 4: 300
Correct Answer: 200
Solution : The correct answer is (b) 200
GDP at market price = National income + Depreciation + Indirect taxes - Subsidies + Net factor income from abroad
GDP at market price = INR 1,100 crore
Net factor income from abroad = INR 100 crore
Indirect taxes - Subsidies = INR 150 crore
National income = INR 850 crore
Plugging in the given values into the formula:
1,100 = 850 + Depreciation + 150 - 0 + 100
Rearranging the equation:
Depreciation = 1,100 - 850 - 150 - 100
Depreciation = 200 crore
Therefore, the aggregate value of depreciation is INR 200 crore.
