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Question

if fnal producer goods are used in the production process, then what is the difference between final producer goods and intermediate goods?

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Solution

Final producer goods or capital goods such as plants, machinery, etc. are used in the production process. They can be differentiated from intermediate goods in the sense that while intermediate goods undergo transformation in the production, final producer do not undergo any transformation, rather, they just support the production process. Final producer goods or capital goods are treated as final goods in the National Income accounting.


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