Giving reason, explain how should the following be treated in estimating national income: (i) Expenditure on fertilizers by a farmer.
Giving reason, explain how should the following be treated in estimating national income:
(i) Expenditure on fertilizers by a farmer.
(ii) Purchase of tractor by a farmer
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Reasons :
(i) Expenditure on Fertilizers-It is intermediate cost for the farmer and deducted from the value of output while arriving at National income, Therefore, not included.
(ii) Purchase of Tractor-lt is included because it is capital formation / investment by the farmer
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