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Question:

Which among the following are final goods and which are intermediate goods?

Solution:

(a) Milk purchased by a tea stall is an intermediate good as it is used as input in the production process. (b) Bus purchased by a school is a final good as it is investment expenditure and is a capital good. (c) Juice purchased by a student from a school canteen is a final good as it ends up in final consumption and this is a perfect example of a final good.