What is the final goods?

Final goods can be best summarized as consumer products and services. They are finished products unlike the sources used to produce these products. Final goods can therefore be described as items that do not require further processing and are not sold for the production of new products. The annual value of these items, if produced within the nation, is used to determine the gross domestic product (GDP). A large proportion of items that consumers buy must undergo a production that often includes a number of phases. Items that are used or manipulated during production are called medium goods.

There are many medium goods such as oil, rubber and metal. These items are generally sold knowing that more processing will be done than they are desirable for the end user. For example, the average individual does not want steel and rubber. Instead, he wants a car with tires that are considered to be the final goods. When an individual buys these items, in general he will not use them to make newh products.

One way to find out if the items are final goods is to consider whether they provide satisfaction. For example, clothing and shoes are objects that people enjoy when buying and usually desire to use because they have them. The same cannot be said if these individuals had to buy raw cotton and hide because these items would not offer pleasure until they were processed. Most retail items can therefore be safely considered to be final products.

Assessment of final goods is generally important because it is used to determine GDP. GDP country is an economic indicator of how well the nation is doing. It is calculated by adding the values ​​of the final goods that the nation produces on the domestic market in the range of the year without the nationality of individuals performing production.

Gross National Product (HNP) is another economic indicator that relies on the evaluation of the value of the finalproducts and services. However, this image is calculated differently than GDP. To determine the GNP, the nation evaluates the value of the final goods produced by its citizens, although production occurs in foreign countries. This picture excludes the value of goods produced to a foreigner.