An example of an intermediate good would be A lumber used by a consumer to build a fence in his or her yard. B pencils purchased by a restaurant to be used to take orders C an airplane purchased by the government D Social Security payments made by the government
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Step 1: An intermediate good is a good that is used in the production of another good. Show more…
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Briefly explain whether each of the following transactions represents the purchase of a final good. a. The purchase of flour by a bakery b. The purchase of an aircraft carrier by the federal government c. The purchase of French wine by a U.S. consumer d. The purchase of a new airliner by American Airlines
Majid B.
GDP:Measuring Total Production and lncome
Gross Domestic Product Measures Total Production
Since we use GDP to determine a nation's health, we can only add the market value of the goods and services produced in the United States (domestic production) for a single year. We also do not add the value of intermediate goods, ingredients/items used to produce final products. We only count the value of final goods and services which have been produced within the year. Including the value of both the intermediate goods and the final goods and services would lead to double counting and increase the value of GDP. Directions: For each item, place either an "I" if the scenario is an intermediate product or an "F" if it is a final product. a. Shampoo is bought and used by a hair stylist in the mall. b. A family buys some finger paint for their child to use. c. A person buys a tire to replace a flat one on their car. d. A hotel chain buys a box of pens. e. Flour is bought and used to bake a cake to be sold at a bakery. f. Someone buys a steak to grill at home. g. An accounting firm buys calculators for its accountants. h. A person buys shampoo to use at home. i. Flour is bought and used to bake a cake for a birthday. j. A student buys a pack of pens to do their homework. k. A restaurant prepares a steak for its customers. l. A factory buys tires to place on their cars. m. An artist buys paints for a painting, with the intention of keeping it. n. A calculator is bought and used for mathematics homework. o. An artist buys paints for a landscape painting, with the intention of selling it.
Jennifer S.
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