Archives Answers

False, It is a final good as it is purchased for investment purposes.

True, It will be included in National Income as it is a part of Factor Income from abroad.

False, Because all such purchases are not necessarily used up for further production or resold during the year. For example, products like machines, vehicles, etc. are final products even though they are purchased by a production unit from other production…

False, National Income can also be less than domestic income when net factor income from abroad is negative. National Income is always more than the Dometic Income only when net factor income from abroad is positive.

False, Only expected obsolescence is a component of depreciation. Any loss of value of fixed assets on account of any unexpected obsolescence is called Capital Loss and not depreciation.

False, Final goods include those goods which are either consumed by the households or purchased by the producers for investment purposes. Thus, if a firm purchased a good for investment purposes. It is also a final goods.

True, If the end-use of the good is for further production or resale, then the good is an intermediate good. However, if the end-use of the good is consumption or investment, then the good is a final good.

False, It depends on the end use of butter. If butter is purchased by a household, then it is a final good. However, if if is purchased by a bakery shop for making cakes, then it is an intermediate good.

True, Because final goods have crossed the production boundary. The all kind of values are already added to the final goods and it is ready for consumption and investment purposes.

False, The concept applies to institutions also, in addition to individuals.