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Questions
Distinguish between final goods and intermediate goods. Give an example of each.
Explain with the help of an example, the basis of classifying goods into final goods and intermediate goods.
Distinguish between final goods and intermediate goods.
Distinguish Between
Solution
| Basis of Difference | Final goods | Intermediate goods |
| Meaning | Final goods are those goods which will not pass any more stages of production process and are ready for use by their final users. | Intermediate goods which are within the boundary line of production, still the value is yet to add to these goods and are not available for use by their final users are called intermediate goods. |
| Inclusion in National Income | Value of final goods are included in the estimation of national income. | Value of an intermediate good is not included in the estimation of national income. Because its value is merged with the value of final goods. |
| Examples | Milk purchased by a household. | Papers purchased by Newspaper agency for printing news are intermediate goods. |
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Basic Concepts - Intermediate Goods
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