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Explain the transactions relating to uses of final goods and service.

Explain the transactions relating to uses of final goods and service.

Course: B.Com

1 Answer
Use of final goods and services or disposition of final output: total supply of final goods and services are used as:

Final consumption expenditure: Final consumption expenditure consists of expenditure incurred by resident institutional units on goods or services that are used for the direct satisfaction of individual needs or wants or the collective needs of members of the community. Final consumption expenditure nay take place on the domestic territory or broad. The expenditure includes outlays on both durable and non-durable goods and services.

Final consumption of government (PGS) and private non-profit bodies (PPNSH): The final consumption by them is measured as total services they, produced for own use. Government final consumption expenditure is measured es services provided by general government for self-consumption. Such services are valued at their cost to government. The expenditure of PPNSH includes purchases of goods and services received in kind, wages and salaries, depreciation, and net indirect taxes.


Gross domestic capital formation (GDCF): It is the sum total of gross capital formation and increase in stocks within the economy. It includes the net purchase of durable goods (net means from total purchases the sale of second hand goods is reduced. It comprises of addition to stocks, repair and maintenance, improvement of land, reclamation, extension of timber tracts, draught animals, etc.

Exports of goods and services: Exports are goods and services sent to abroad and are valued at free on board, whereas imports are goods and services purchased from abroad and are valued at cost, insurance and freight.

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July 15, 2018