Question

Differentiate between final and intermediate goods. (4 points)

Answer 1

Difference between Intermediate Goods and Final Goods :
$\begin{array}{ccc}& \text{Intermediate Goods}& \text{Final Goods}\\ \text{1.}& \text{These goods are used for producing other}& \text{These are used for final consumption and final}\\ & \text{goods. So, value is added to these goods later.}& \text{investment.}\\ \text{2.}& \text{These goods have a derived demand.}& \text{These goods have a direct demand.}\\ \text{3.}& \text{The value of these goods is not included}& \text{The value of these goods is included while}\\ & \text{while calculating national income}& \text{calculating national income.}\\ \text{4.}& \text{These goods do not cross the production}& \text{These goods have crossed the production boundary.}\\ & \text{boundary.}& \end{array}$