Question

Classify the following as a final or intermediate good. Give reasons for your answer.

A car purchased by a company for business purposes.

Answer 1

• The car is used directly in the provision of services (for example, transportation, delivery, or rental).
• It is not meant for final consumption or investment, but rather to create revenue through business operations.
• According to national revenue accounting, an intermediate good is one that is used in the production process.
• To avoid double counting, its value is not included individually in national income calculations.