Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

From the following information, calculate the value of intermediate consumption.
Imports of television= ₹ 2,000
Table for use at home = ₹ 4,000
Purchase of raw materials = ₹ 2,500

Options:

₹2,000

₹6,000

₹2,500

₹3,500

Correct Answer:

₹2,500

Explanation:

The correct answer is Option 3: ₹2,500

Intermediate goods are goods and services that are used as inputs in the production process of other goods and services. They are not sold directly to consumers but are used up or transformed in the production process. Expenditure made for further processing or resale and not for final consumption will come under intermediate consumption.

Here the raw materials will be processed further and hence their value is included in intermediate consumption

Imports of television and purchase of table for use at home are part of final goods to be used for consumption.