Which of the following are recognised as final goods while estimating the gross domestic product in India?
- Wheat purchased for making roti in a house
- Wheat purchased for making roti in a hotel
- Tea bags used to make tea in a house
- Tea bags used to make tea in a university hostel canteen
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Only a and c.
Final goods are those that are consumed by the end users and are not used for further production. While estimating Gross Domestic Product (GDP), only final goods are counted to avoid double counting.
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(a) Wheat purchased for making roti in a house and
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(c) Tea bags used in a house
are final goods because they are used for personal consumption.
In contrast:
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(b) Wheat used in a hotel and
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(d) Tea bags used in a university canteen
are intermediate goods, as they are used in the process of producing other goods/services.