Question

Classify the following into an intermediate good and a final good. Give reasons for your answer.

Stationary purchased by the government.

Answer 1

An intermediate good because it is fully used for providing government services

Reasons:

• Stationery is utilized in the daily operations of government offices and agencies.
• It is completely consumed in the process of providing government services (such as administration, education, and social welfare).
• Because it is not utilized for final consumption or long-term investment and is consumed within the accounting year, it is classified as an intermediate good.
• Intermediate goods are those that are utilized in the manufacture of other goods or services, and stationery, in this case, serves that purpose.