Explain intermediate goods with example.

Asked by Topperlearning User | 15th Apr, 2016, 10:26: AM

Expert Answer:

Goods which are within the boundary line of production with it value yet to be added and are unavailable for uses by their final users are called intermediate goods.

These goods are consumed by another firm and are used as intermediate goods in the production process or for further sale. For example, papers purchased by newspaper agency for printing news are intermediate goods.

Value of intermediate goods is merged with the value of final goods. Here the value of intermediate good is not included in the estimation of national income.

Answered by  | 15th Apr, 2016, 12:26: PM