Is Expenditure on fertilizers by a farmer included/excluded in national income?
Is Expenditure on fertilizers by a farmer included/excluded in national income?
Anurag Pathak Changed status to publish December 9, 2023
No,
Expenditure on fertilizers by a farmer will not be included in the national income as it is an intermediate cost for the farmer and deducted from the value of output while arriving at the national income.
Explanation:-
The national income only adds to the value of final goods and services.
The cost of expenditure on fertilizers is already added to the final goods and services produced by a farmer.
If expenditure on fertilizers is added to the national income, it will lead to double counting.
Anurag Pathak Changed status to publish December 9, 2023