Choose if the given statement is true or false:

Intermediate goods are for final consumption.

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True

False

answer is B.

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Detailed Solution

The given statement is false. The "intermediate goods" refers to the goods companies employ to produce other products or services. In other words, they serve as ingredients in producing final goods and services. They can be called producer goods or semi-finished goods as well. This means that producing final or consumer commodities uses intermediate items. A corporation may create intermediate products (like machinery) to be used in manufacturing completed goods, or it may sell them to another company involved in manufacturing finished goods. These goods become final after some value addition as they are used to help produce final goods. Thus, Intermediate goods are not for final consumption.

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