Sheetal purchased wheat flour for her bakery from the flour mill.

Question

Identify and Explain the following concepts:

Sheetal purchased wheat flour for her bakery from the flour mill.

Answer 1

Concept : Intermediate goods. 

Explanation : In the above case, wheat flour is not the final product. 

Wheat flour will be used by Sheetal to produce cake or pastry or biscuits which will be final product for her.

So, in above case wheat flour is considered j! (8) as intermediate goods. Intermediate goods are excluded while calculating NI by Final Ans. Goods approach method and included while calculating by Value Added approach method.