Question

What is the difference between:

Final goods and intermediate goods? Then Provide a real world example of each one.(10)

and what is the diffrence between GDP and GNP. Explain in detail. (15) in your own words

Answer 1

Final goods are ready to consume whereas intermediate goods are still incomplete and need value addition.

For eg, Bread is your final good which is ready to consume whereas wheat flour is intermediate good which needs to be processed.

GDP is gross domestic product and GNP is gross national product.

GNP = GDP + Net factor income from abroad

GNP considers national output by excluding foreign produce in domestic land and including domestic produce in the foreign land.