| Question | 2. Distinguish between Final goods and Intermediate goods? |
| Class | Class 12 |
| Subject | Economics (Macroeconomics) |
| Category | Class 12 Economics Solutions Sandeep garg |
Q.2 Distinguish between Final goods and Intermediate goods. Give examples.
“OR”
Explain the basis of classifying goods into intermediate and final goods. Give suitable examples.
Solution :- Final good and intermediate good can only be differentiated on the basis of the end use of the good. The goods which are used up in the same year are also classified as intermediate goods.
| BASIS | FINAL GOOD | INTERMEDIATE GOOD |
| Nature | They are included in both national and domestic income. | They are neither included in national nor in domestic income. |
| Demand | They have “Direct Demand”. | They have “Derived Demand”. |
| Value addition | They are ready for use so NO VALUE to be added. | They are not ready for use so VALUE is to be added. |
| Production boundary | They have crossed the production boundary. | They have not crossed the production boundary. |
Related Questions – Sandeep Garg Macroeconomics Class 12 Solutions Basic Concepts of Macroeconomics
- Distinguish between Factor income and Transfer income.
- Distinguish between Final goods and Intermediate goods.
- Machine purchased is always a final good.” Do you agree?
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