Question : Which of the following statement are true as per the mechnaism given in the picture. Cotton and thread are final goods whereas cloth is an intermediate good. As long as, goods are under production boundry, they are intermediate goods. Goods outside production boundry are co ...

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Question : Which of the following statement are true as per the mechnaism given in the picture.

Cotton and thread are final goods whereas cloth is an intermediate good.

As long as, goods are under production boundry, they are intermediate goods.

Goods outside production boundry are consumer goods.

Final goods and consumer goods are different from eachother.

Option 1: 1,2&3
Option 2: 3&4
Option 3: 1&4
Option 4: 2&3

Team Careers360 6th Jan, 2024

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Answer (1)

Team Careers360 17th Jan, 2024

Correct Answer: 2&3

Solution :

The boundary of the production process is an imaginary line. Any products or services that cross this boundary are regarded as final items. Production-bound items are regarded as intermediate goods that require value addition.

All consumer goods are final goods.

Hence, Option D is correct.

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