Classify each of the following items as a final good or service or an intermedia

Question

Classify each of the following items as a final good or service or an intermediate good or service, and identify which is a component of consumption expenditure, investment, or govemment expenditure on goods and services A. A new apartment building B. Aluminum sheets bought by Boeing C. A DVD bought by a household D. A new limousine for the president O 1. A is a final good that is investment, B is a final good that is investment, O2. A is a final good that is consumption expenditure, B is a final good that is investment, O 3. A is a final good that is investment, B is an intermediate good 4. A is a final good that is consumption expenditure, B is an intermediate good, O5. A is a final good that is investment, B is an intermediate good, C is a final good that is investment, and D is an intermediate good. C is a final good that is consumption expenditure, and D is a final good that is government expenditure. C is a final good that is investment, and D is an intermediate good. C is a final good that is consumption expenditure, and D is an intermediate good. C is a final good that is consumption expenditure, and D is a final good that is government expenditure

Explanation / Answer

5 is the correct option

Reason

DVD is consumed by the household, so it is final good for consumption and houses are final good for investment. Aluminium sheet is used in the manufacture of airplane, thus it must be an intermediate good.

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