Read the passage carefully and answer the questions based on the passage:

Aggregate Demand and Its Components

Consumption may denote not what people have actually consumed in a given year, but what they had planned to consume during the same period. Similarly, investment can mean the amount a producer plans to add to her inventory. It may be different from what she ends up doing. The planned values of the variables are called their ex ante measures. The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. The induced component of consumption, cY shows the dependence of consumption on income.

Machines produced in an economy in a given year are a part of ______.

Final goods.

The correct answer is Option (4) → Final goods.

Final Goods: These are goods produced for direct consumption or investment. They are the end products that are not used as inputs in the production of other goods in the same period. Machines are typically purchased by firms for long-term use in the production process and are considered capital goods, which are a form of investment and thus categorized as final goods when calculating GDP.

• Consumption Goods: These are goods purchased by households for direct satisfaction of their wants (e.g., food, clothes, cars for personal use). While machines are consumed in a sense over their lifespan, they are specifically consumed by firms as part of their capital stock, not by households for immediate personal use.

• Normal Goods: This is a classification of goods based on how their demand changes with income (demand increases as income increases). It's a consumer behavior concept, not a classification based on their role in production or their finality.

• Intermediate Goods: These are goods used as inputs in the production of other goods. For example, steel used to make a car is an intermediate good. Machines, however, are typically used to produce other goods over a long period, not used up in a single production cycle.