ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In fact, most “domestically produced” goods include some foreign parts or components. It is also important to notice that while C, I, and G measure spending on only final goods and services, exports (X) and imports (M) also include intermediate goods.

Detailed explanation-2: -Intermediate inputs – the parts and materials imported to make products for consumption domestically and abroad – are a growing force in world trade. Catalysed by the globalisation of production, the large and rapidly increasing use of imported inputs for exports has important policy implications.

Detailed explanation-3: -Intermediate goods are those goods which are used in the production of final goods. Some examples of intermediate goods are wheat, soil, crude oil, steel, sugar etc.

Detailed explanation-4: -Intermediate goods are referred to as goods that are used by businesses for producing goods or services. These goods are also known as producer goods. In other words, intermediate goods are used for producing final goods or consumer goods.