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Fact 20.1.2
Classify each of the following items as a final good or an intermediate good, and identify which is a component of consumption expenditure, investment, or government expenditure on goods and services:
Item 1. A DVD bought by a household
Item 2. A new airplane bought by WestJet
Item 3. Aluminum sheets bought by Boeing
Item 4. A new limousine for the prime minister
-Refer to Fact 20.1.2. Item 3 is ________ and item 4 is ________.

Question

Quizplus · Accepted Answer

Item 3 (Aluminum sheets bought by Boeing) is an intermediate good because it will be used in the production process of airplanes (a final good). Item 4 (A new limousine for the prime minister) is a final good that is government expenditure because it is directly purchased by the government for official use. Items 1 and 2 are both final goods, but it is not specified which type of expenditure they are a component of, so they are not relevant to the question.

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