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Categorizing goods into intermediate and final goods

Describe the basis of categorizing goods into intermediate and final goods. Give appropriate illustrations.

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The Goods that are purchased by a production unit from other production units and signify for resale or for using up completely throughout similar year are termed as intermediate goods for illustration: raw material. Goods that are bought for consumption and investment are termed as final goods for illustration: Purchase of machinery for instalation in the factory.

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