Distinguish between intermediate goods and final goods. Give an exampl

Distinguish between intermediate goods and final goods. Give an example of each.

Answer»

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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Distinguish between intermediate goods and final goods. Give an example of each.

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