Difference between Final Goods and Intermediate goods.

Q4. What is the difference between Final Goods and Intermediate goods.

Ans.

Basis Final Goods Intermediate Goods
Meaning Final goods refer to those goods which are used either fir consumption or invesment. Intermediate goods refer to those goods which are used either for resale or for further production in the same year.
Nature They are included in the national income as well as domestic income. They are included neither in the national income nor domestic income.
National Income and Domestic Income. The value of final goods and services will be included in the estiamtion of domestic income and national income. The value of intermediate goods and services will not be included in the estiamtion of domestic income and national income.
Demand They have a direct demand as they satisfy the wamnts directly. Ther have a derived demand as their demand depends on the demand for final goods.
Value They are ready for use by their final users i.e. no value has to be added to the final goods. They are not ready for use by their final users i.e. some value has to be added to the intermediate goods.
Production Boundary They have crossed the boundary line of production. They are still within the production process.
Example Milk used by households for consumption, car purchased as an investment. Milk used in dairy shop for resale, coal used in factory for further production.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

25 Views
%d bloggers like this: