Rashmi has done her graduation in hotel management and is very passionate about baking. She decides to open a bakery in her house and sell items such as cakes, breads, cookies etc. The flour used by Rashmi for baking is a/an-
Answer & explanation
Correct answer: option 1
The correct answer is option 1: Intermediate good
Intermediate goods are the goods which are used to produce a final good and or not directly consumed .In Rashmi's bakery, the flour is used as an input in the production process to create final products such as cakes, bread, and cookies. However, the flour itself undergoes transformation and is not sold directly to consumers. Therefore, the flour used by Rashmi for baking is classified as an intermediate good.