Question

Distinguish between National income at market prices and national income at factor cost.

Answer 1

Answer:

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National income at market price which includes the impact of subsidies which tend to decrease and the impact on indirect taxes which tend to increase the market price. National income at factor cost will not get any impact of subsidies and indirect taxes.

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Answer 2

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National income at market price is so total of national income including the Increasing affect of taxes and the decreasing effects of subsidies given by the govt.

National income at factor price included only the factors cost no matters of any taxes and subsidies.