Final goods are those goodsa)Which are used either for final consumpti...
Consumer goods are ultimately consumed, rather than used in the production of another good. For example, a microwave oven or a bicycle that is sold to a consumer is a final good or consumer good, but the components that are sold to be used in those goods are intermediate goods.
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Final goods are those goodsa)Which are used either for final consumpti...
Final goods refer to the goods that are ready for consumption or are used as an input for investment purposes. These goods have already undergone the production process and are available for sale to the end consumer. The correct answer is option A, which states that final goods are used either for final consumption or for investment.
Explanation:
Final goods are the end products that are directly consumed by individuals or used by businesses for investment purposes. These goods are different from intermediate goods, which are used in the production process but are not the final product.
The following points explain why final goods are used either for final consumption or for investment:
1. Final Consumption:
Final goods are primarily used for final consumption. This means that they are purchased by individuals or households for their personal use or satisfaction of wants. Examples of final consumption goods include food, clothing, electronics, automobiles, etc.
2. Investment:
Final goods can also be used for investment purposes. Investment refers to the purchase of goods and services with the intention of generating income or creating future production capacity. Businesses often invest in machinery, equipment, buildings, and other capital goods to enhance their production capabilities and increase profitability.
3. Differentiated from Intermediate Goods:
Final goods are distinguished from intermediate goods, which are used in the production process but are not the end product. Intermediate goods are further processed or transformed into final goods. For example, steel is an intermediate good used in the production of automobiles, which are the final goods.
4. Measurement of GDP:
Final goods are crucial in the calculation of Gross Domestic Product (GDP), which is a measure of a country's economic performance. Only the value of final goods is included in GDP calculation to avoid double-counting. Intermediate goods are excluded from GDP as their value is already accounted for in the final goods.
In conclusion, final goods are those goods that are used either for final consumption by individuals or for investment purposes by businesses. These goods have completed the production process and are ready for sale to the end consumer.