Read the following statements: Assertion (A) and Reason (R).
Assertion (A): Investment goods are part of the intermediate goods.
Reason (R): Investment goods produced in an economy in a given year are not ‘used up’ to produce other goods but yield their services over a number of years.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Assertion (A) is false but Reason (R) is true.
Investment goods are capital goods, and capital goods are final goods. So A is false. R is true.
Assertion (A): Investment goods are part of the intermediate goods. — False. Investment goods are not used up as inputs. They are final goods, though not consumed.
Reason (R): Investment goods produced in an economy in a given year are not ‘used up’ to produce other goods but yield their services over a number of years. — True. Machines and tools are not used up; they serve production for many years.
NCERT (2026-27): “2.1 Some Basic Concepts of Macroeconomics … Then there are other goods that are of durable character which are used in the production process. These are tools, implements and machines. While they make production of other commodities feasible, they themselves don’t get transformed in the production process. They are also final goods yet they are not final goods to be ultimately consumed. Unlike the final goods that we have considered above, they are the crucial backbone of any production process, in aiding and enabling the production to take place. These goods form a part of capital, one of the crucial factors of production in which a productive enterprise has invested, and they continue to enable the production process to go on for continuous cycles of production. …” |