Given below are some statements. Read them carefully and choose the correct statement (s) from the given options.

Statement 1: If we consider all the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods.

Statement 2: Of the total production taking place in the economy, a large number of products don’t end up in final consumption and are not capital goods either.   

Both statements are correct.

The correct answer is option 3: Both statements are correct.

If we consider all the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods. As final goods they do not undergo any further transformation in the economic process.

Of the total production taking place in the economy a large number of products don’t end up in final consumption and are not capital goods either. Such goods may be used by other producers as material inputs. Examples are steel sheets used for making automobiles and copper used for making utensils. These are intermediate goods, mostly used as raw material or inputs for production of other commodities. These are not final goods.