Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Which of the following are intermediate goods?
    (A) Milk purchased by a household
    (B) Sugar purchased by a restaurant
    (C) Furniture purchased by school
    (D) Chalk and duster purchased by school
    (E) Printer purchased by a lawyer

Choose the correct answer from the options given below.

Options:

(B), (D), (E) only  

(B), (D) only  

(A), (B), (D) only   

(A), (B), (C), (D), (E)

Correct Answer:

(B), (D) only  

Explanation:

An intermediate good is a product used to produce a final good or finished product. They are mostly used as raw material or inputs for production of other commodities.

(A) Milk purchased by a household - considered as a final product, as used for the consumption purpose and direct satisfaction of wants.
(B) Sugar purchased by a restaurant - considered as an intermediate product, as sugar will be used as raw material for making deserts etc.
(C) Furniture purchased by school - considered as a final product, as it is purchased for the purpose of investment.
(D) Chalk and duster purchased by school - considered as an intermediate product, as it is purchased for providing educational services in the school
(E) Printer purchased by a lawyer - considered as a final product, as it is purchased for the purpose of investment.