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Which among the following are capital goods and which are consumer goods and why? (a) A car used as a taxi (b) Refrigerator in a hotel (c) Air-conditioner in a house OR Define intermediate consumption and explain it with an example. How is it different from finel consumption? |
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Answer» SOLUTION :A car used as a taxi: It Is a capital good because it is used for producing services for generating income. (b) Refrigerator in a hotel: It is a capital good because it is used for providing services over a period of time to the production unit. (C ) Air-conditioner in a house: It is a consumer good because It is used for satisfaction of a want by a household. OR Intermediate Consumption refers to the expenditure incurred by a production unit on purchasing those goods and services from other production units, which are meant for resale or for using up completely during the same year. For Example: MILK purchased by a hotel because It is purchased from another production unit for resale Indirectly. WHEREAS Final Consumption refers to the expenditure on goods and services meant for final consumption and INVESTMENT. |
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