Question

“Saksham owns a manufacturing facility where microchips are utilized in the production of electronic devices, including computers and smartphones.”
From the above text, identify whether the given statement refers to an intermediate goods or final goods. Give valid reason in support of your answer.

Hint:

Intermediate goods are used in further production, while final goods are consumed directly.
NVA\textsubscript{FC = Sales + Change in stock – Intermediate consumption – Depreciation + Subsidies – Indirect taxes

Answer 1

The statement refers to intermediate goods because the microchips mentioned are used in further production (computers and smartphones) and are not meant for final consumption. Intermediate goods are those goods which are used as inputs in the production of other goods and services.