The correct answer is Both I and II. Explanation & Key Takeaways: • Intermediate goods are not final goods. • All of the following are examples of an intermediate good: • a) Car sold by a dealer of second-hand cars: It is an intermediate good since cars are purchased by a dealer as goods for resale. • b) Steel and cement used to construct a flyover: It is an intermediate good since steel and cement are used as a raw material. • c) Fertilizers purchased by a farmer: It is an intermediate good since fertilizers is used as a raw material in agriculture. Important Notes: • Intermediate goods are referred to as goods that are used by businesses for producing goods or services. • These goods are also known as producer goods. • Points on Intermediate Goods • They are purchased by one production unit from another production unit. These goods stay within the production boundary. • These goods have derived demand, as their demand depends on the demand for the final goods. • The value of these goods is added with the value of the final goods.