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Intermediate Good

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An intermediate good is a product used to produce a final good or finished product. These goods are sold between industries for resale or the production of other goods. One example of an intermediate good is salt, a product that is directly consumed but also used to manufacture food products.

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Material or item that is a final-product of a process, but is also used as an input in the production process of some other good. For example, sugar is consumed directly as well as in the manufacture of food products. See also intermediate product.

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Intermediate goods are not counted in a country's GDP, as that would mean double counting, as the final product only should be counted, and the value of the intermediate good is . “ In foundry production, the iron ore is one of the intermediate goods used in gray iron because it is a raw material used in production of the final product. ” Was this Helpful? YES NO 10 people found this helpful.

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Intermediate goods also need to be distinguished from capital goods. A capital good is the machinery, land, or tools used in the production and distribution of a good or service. Unlike intermediate goods, capital goods are not included in the end product. Because the approach is new, many questions regarding upstream and downstream linkages have not yet been addressed in the literature, especially with respect to public inputs as factors of production and the interaction they create between intermediate goods suppliers and final goods producers.