Difference between Intermediate goods and Capital Goods? (3m)
Basis of Difference
Capital goods refer to those final goods that are purchased by the producers (firms) for using them in the process of production. They do not require further processing.
Intermediate goods refer to those goods that are used as raw-materials or inputs by the producers in the production process. They require further transformation.
For example, machinery purchased by the producer for using it in production process.
For example, cotton purchased by a textile industry for making cloth is an intermediate good.
Inclusion in National Income
The money values of these goods are included in the estimation of national income.
The money values of these goods are not included in the estimation of national income.
capital goods -goods that are fixed asset of producer and are of high value .
2.these are used for several years.
3.eg plant and machinery
on the other hand intermediate goods are those goods which are not ready for use by their final user .valuse is still be added
these are either raw material or goods used as intermediate goods.eg wood for furniture.
2. these are not used for several years.
3. these are not of high value.