What are goods that are utilized in the production of final goods called?

Goods that are utilized in the production of final goods are referred to as intermediate goods. These items are not sold directly to consumers but are instead used in the manufacturing process to produce finished products. Intermediate goods can include raw materials, components, and semi-finished products that undergo further transformation before reaching the consumer.

For example, steel used to manufacture automobiles or flour used to create bread are considered intermediate goods. They play a crucial role in the supply chain and production processes. This classification is essential in measuring economic output, as GDP calculations typically include only final goods, excluding the value of intermediate goods to avoid double counting. Understanding the distinction between final goods and intermediate goods is fundamental to grasping macroeconomic production and economic metrics.