Distinguish between intermediate goods and final goods. Give an example of each.
Distinguish between intermediate goods and final goods. Give an example of each.
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Goods purchased by a production unit from other production units for resale or for using them completely during the same year are intermediate goods, whereas goods purchased for consumption/investment are final goods.
Intermediate good: Raw material etc.
Final good: Machine purchased for installation in a factory etc.
Detailed Answer:
| Intermediate Goods | Final Goods |
| (i) These goods to be used as raw material for the production of other goods during the accounting year. | There goods not to be used as raw material for the production of other goods during the accounting year. |
| (ii) These goods to be used for resale by the firms to make profits during the accounting year | These goods not to be used Ior resale by the firms to make profits during the accounting year. |
| (iii) Value is yet to be added to these goods. | Value is not to be added to these goods |
| Eg. - Raw material | Eg. - Machine purchased for the installation in the i.rctor.1 |
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