Question

To arrive at the value of Net Value Added at Market Price (NVA$_{MP}$), ....... must be ....... to/from Gross Value Added at Market Price (GVA$_{MP}$). (Choose the correct option to fill in the blanks)

• A. Depreciation, added
• B. Depreciation, subtracted
• C. Net indirect taxes, subtracted
• D. Net indirect taxes, added

Hint:

When calculating NVA$_{MP}$, always remember that net indirect taxes are added to GVA$_{MP}$, while depreciation is typically subtracted in other calculations like GDP at constant prices.

Answer 1

The Correct Option is D

Net Value Added at Market Price (NVA$_{MP}$) is derived by adjusting Gross Value Added at Market Price (GVA$_{MP}$) for net indirect taxes. Specifically, net indirect taxes (calculated as taxes less subsidies) are added to GVA$_{MP}$ to determine NVA$_{MP}$, as these taxes represent an element of economic value that influences the final market price of goods and services.