Question

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

Explain with the help of an example, the basis of classifying goods into final goods and intermediate goods.

Distinguish between final goods and intermediate goods.

Answer 1

Sr. No.	Basis of Difference	Final goods	Intermediate goods
1.	Meaning	Final goods are those goods that will not pass any more stages of the production process and are ready for use by their final users.	Intermediate goods, which are within the boundary line of production, still have value yet to be added to these goods and are not available for use by their final users, are called intermediate goods.
2.	Inclusion in National Income	The value of final goods is included in the estimation of national income.	The value of an intermediate good is not included in the estimation of national income. Because its value is merged with the value of final goods.
3.	Examples	Milk purchased by a household.	Papers purchased by newspaper agencies for printing news are intermediate goods.