Question

Giving reason, state whether the following is included in national income:

Wheat grown by a farmer used for family consumption.

Answer 1

• Yes, wheat grown by a farmer for family consumption is included in national income.
• This is because the wheat produced is a result of the farmer’s productive activity during the year, and national income includes the value of all final goods and services produced, whether they are sold in the market or used for self-consumption.
• Even though the wheat is not sold, it has an imputed market value based on current prices, and this value must be included in national income to reflect the total production in the economy.