Question

explain Intermediate goods

Answer 1

Intermediate goods refer to those goods which are used either for resale or for further production in the same year.

Intermediate goods are neither included in national income nor in domestic income as they are already included in the final goods.

Intermediate goods have a derived demand as their demand depends on the demand for final goods.

Intermediate goods are still within the production boundary. They are not ready for use, i.e. some value has to be added to the intermediate goods.

For example - sugar used by sweet shop for making sweets , coal used in factory for further production.