Question

Fabric produced from cotton is an _____ good while clothing made from the fabric is a consumer good.

• A. Intermediate
• B. Arbitrate
• C. Moderate
• D. Conciliate

Answer 1

The correct option is A Intermediate

Fabric produced from cotton is an intermediate good while clothing made from the fabric is a consumer good. Some goods especially raw materials are called as intermediate goods. For instance machinery fixed in factory is capital goods but the cotton used as raw material is intermediate goods. Thus, the consumption goods are also referred as consumer’s good while capital goods and intermediate goods are termed as producers goods.