What is the difference between a final product and an intermediate product?

The main reason for distinguishing between final and intermediate products is to avoid double counting. But in actual production and life, many products can be both final products and intermediate products. For example:

For agriculture, flour is the final product; For industry, flour is an intermediate product. Coal is used as a raw material in the chemical industry and other industries, and as a fuel in the food production and processing industry, but it is used as a final product for heating homes in winter or cooking meals. In this way, it is not so easy to distinguish which part of coal is counted as a final product and which part is considered an intermediate product when calculating GDP.

The key to the distinction is not in its specific material form, but in the role of the product in the production process. It can generally be distinguished by whether it is duplicated or not**.

An intermediate product can be regarded as a raw material product, which is used for the production of final products, that is, it must continue to be processed and produced in the current year after it is produced; If it is put on the price of the goods, it will be sold directly.

If it is purchased by consumers and used directly, it is a special case and is included in the total value, otherwise it cannot be included.

Intermediate goods refer to goods and services such as raw materials, fuels, etc., that are used for the production of other products for reprocessing or resale.

A product goes through a series of production processes from the processing of the primary product to the provision of final consumption, and the products that are in the process before becoming the final product are collectively referred to as intermediate products. For example, cotton is a primary product, and cotton yarn, grey cloth, colored cloth and cut clothing fabrics are obtained after being put into the production process.

and so on are intermediate products. The amount of intermediate products mainly depends on the scale of industrial production and the production cycle of products. The larger the scale of industrial production, the longer the production cycle of the product, and the more intermediate products. in the national economy.

In the input-output table, intermediate goods are the objects of labor for productive consumption by various departments.

composition, the intermediate goods of a sector are equal to the balance of the total products of the sector minus its final products. It is an important basis for arranging the national economic plan and the production of various products, so as to maintain a rational proportional relationship between various departments. Because intermediate products occupy a large amount of materials and funds, and cannot directly meet the needs of final consumption, it is generally required to reduce their proportion in the whole social product as much as possible.

Intermediate goods are primary products and industrial re-products that continue to be put into the production process, and are products that have undergone some manufacturing or processing process, but have not yet reached the final product stage. For example, steel and cotton yarn are intermediate products.

The final product is a symmetry of "intermediate goods", which is produced in a certain period of time and is no longer processed during the same period and is available for final consumption and use. It is an important indicator for examining the results of economic work from the perspective of the balance of input and output of the national economy, and it is also the basis for calculating the gross national product. Its contents include:

Personal consumer goods, public consumer goods, products used for investment in fixed assets, products used to increase reserves, products used for national defense, and products for net exports for a certain period (year). The final product is strictly defined as a "product for living consumption", and in practical application, the final product is divided into individual final consumer goods and collective consumer goods. Primary products are defined as products obtained from natural resources through labour and processed as objects of labour.

Intermediate products are defined as products that use primary products as raw materials and are processed as means of labor. This classification method has certain innovative significance in the classification method of national economic statistics and social products, and provides a scientific basis for formulating plans based on the final product.

In national income accounting, whether a product is an intermediate product or a final product cannot be based on the product's materiality.

qualitative properties, but only on the basis of whether the product enters the hands of the end user. For example, I.

We cannot judge whether flour and bread are final products or intermediate products based on the material properties of the product.

It would seem that flour must be an intermediate product and bread must be a final product. Not really. If the flour is purchased by a bakery, the flour is medium.

If the flour is purchased by a housewife, it is the final product. Similarly, if the bread is sold by a bakery to consumption.

, the bread is the final product, but if the bread is given to the bakery by the manufacturer**, it is still an intermediate product.