There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.

Assertion: An item that is meant for final use and will not pass through any more stages of production or transformations is called a final good.

Reasoning: A final good once sold, passes out of the active economic flow.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

The correct answer is option 1: Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Assertion: An item that is meant for final use and will not pass through any more stages of production or transformations is called a final good. This is correct. Final good is indeed a product or service intended for final consumption by an end user. It won't undergo any further processing or transformation before reaching the consumer.

Reasoning: A final good once sold, passes out of the active economic flow. This is also correct. Once a final good is sold and consumed, it exits the active cycle of production and trade. It will not undergo any further transformation at the hands of any producer. This removal from the active economic flow signifies its final use.

Reasoning (R) highlights the key consequence of a final good being used for its intended purpose. Since it's consumed and exits the active production flow, it supports the concept of a final good as defined in Assertion (A).

NCERT Text: "A final good is an item that is meant for final use and will not pass through any more stages of production or transformations is called a final good. Why do we call this a final good? Because once it has been sold it passes out of the active economic flow. It will not undergo any further transformation at the hands of any produce."