Question

Should purchase of wheat in wholesale market be treated as intermediate consumption expenditure? Give reason. (1

Answer 1

Answer:

Goods which remain unsold during the year are treated as a part of change in stock during the year. These goods become a part of inventory investment of the producers. ... (Q6) Should purchase of wheat in the wholesale market be treated as the purchase of final good ? Ans: Depends upon of type of purchaser

Answer 2

Wheat purchases in a wholesale market should be treated as intermediate consumption expenditure.

• Any good is considered an intermediate good when it is taken or consumed for the further production of finished goods. It acts as an intermediary that helps in the process of making something else.
• Here, it has been mentioned that wheat is being purchased from the wholesale market and generally when anybody buys anything from a wholesale market in bilk then it is generally an intermediary good itself as it is required in larger quantities for the making process of any other goods.
• This wheat purchase shall be added as the expenditure of intermediatory consumption as this wheat is not going to be consumed by the person who purchased it as one cannot directly eat it and this has to further go under the process of refinement to either make flour out of it or anything else.
• Intermediatary goods sometimes can also be finished ones and depend upon their usage and function. Still, here it is not the case and it is going to be an expenditure incurred upon intermediatory consumption itself.

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