Question

differentiate between intermediate and final goods

Answer 1

FINAL GOODS

INTERMEDIATE GOODS

1. USED FOR FINAL CONSUMPTION

NOT USED FOR FINAL CONSUMPTION

2.READY FOR USE BY FINAL USERS

NOT READY FOR USE BY FINAL USERS

3.MADE USING INTERMEDIATE GOODS

USED AS RAW MATERIAL FOR PRODUCTION OF FINAL GOODS

4.THEY ARE FINISHED GOODS

UNFINISHED GOODS

5.VALUE OF FINAL GOODS ARE CALCULATED FOR GDP

NOT CALCULATED AS VALUE OF FINAL GOODS ALREADY INCLUDES THE VALUE OF INTERMEDIATE GOODS

EG: BISCUITS ARE FINAL GOODS

EG: FLOUR, MILK, SUGAR USED IN MAKING BISCUITS ARE INTERMEDIATE GOODS

Answer 2

Answer:

Intermediate goods: These goods are mostly used as raw material for the                                                               production of other goods during the accounting year. These goods may be used for further sale to earn profit during the accounting year. These goods are within the boundary line of production process. These goods are still in the process of value addition and are not available for use by their final users. These goods are not included in the estimation of national income.

Final goods: These goods are not used as raw material for the production of other goods during the accounting year. These goods are not used for further sale to earn profit during the accounting year. These goods are outside the boundary line of production process. A value addition is not required to these goods and is available for use by their final users. These goods are included in the estimation of national income.