Question
Consider the following statements
Select the correct answer using the code given below:
- Capital goods are final goods and are not used as an input
- Intermediate goods are those which have been produced but should be further transformed before they can be used for any purpose
Select the correct answer using the code given below:
Answer: Option B
Answer: (b)
Intermediate goods are semi-finished goods that have been produced by a process but cannot be used as it is and need to go through further production/transformation process to be converted into a final good.
For example, steel sheets. The steel sheets cannot be used as it is and needs to be transformed into final products like automobiles, appliances etc. So (ii) the statement is true.
A particular good will be capital in nature only if it possesses the following three characteristics:
It is a produced durable output of a man-made process
It again acts as an input for the further production processes (to be sold in the market)
While acting as an input, it does not get transformed or consumed (hence it’s a final good)
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Answer: (b)
Intermediate goods are semi-finished goods that have been produced by a process but cannot be used as it is and need to go through further production/transformation process to be converted into a final good.
For example, steel sheets. The steel sheets cannot be used as it is and needs to be transformed into final products like automobiles, appliances etc. So (ii) the statement is true.
A particular good will be capital in nature only if it possesses the following three characteristics:
It is a produced durable output of a man-made process
It again acts as an input for the further production processes (to be sold in the market)
While acting as an input, it does not get transformed or consumed (hence it’s a final good)
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