the final good is an important topic of the national income chapter of macroeconomics in class 12 CBSE Board. In order to calculate National Income only the money value of final goods is taken into consideration.
In simple words, GDP is just sum total of the money value of final goods produced within the domestic territory of a country.
What do you mean final goods in economics class 12
Final goods refer to those goods which are used either for consumption or for investment. Such goods are not meant for resale.
- All goods (durable or non-durable) purchased by consumer households are final goods as they are meant for final consumption purposes.
for example:- tv, fridge, vegetables, electricity, food, etc.
on the other hand, goods purchased by production units (producer) for investment (for capital formation) purposes are termed as final goods.
for example, machinery, furniture, durable goods, etc.
Definition of Final Goods in Economics Class 12
“Goods and services purchased or own produced for the purpose of consumption of Investment are final goods or products.”
“Final goods refer to those goods which are used either for consumption or for investment”
“Final goods are those goods that have crossed the boundary line of production and are ready for use by their final users (consumers and producers.”
Examples of Final Goods
- tv purchased by households
- Machine purchased by Producers
- Food purchased by Households
- Computer purchased by Producers.
All purchases by household whether it is durable or non-durable goods and services termed as final goods.
As far as producers purchased is concerned. Only the purchase of capital goods is termed as final goods.