Consider the following statements regarding 'Consumer Durables': 1. They are goods like food and clothing that are extinguished by immediate consumption. 2. Like capital goods, they undergo wear and tear and need repairs or replacement. 3. They are considered final goods in national income accounting. Which of the statements given above is/are correct?

The correct option is 2 and 3 only. Explanation Goods in an economy are classified based on their durability and end-use. Consumer goods are purchased for direct satisfaction of wants, whereas capital goods are used for the production of other goods and services. Statement-wise Analysis - Statement 1 is Incorrect: Consumer durables are goods that are not extinguished by immediate consumption and have a relatively long lifespan (e.g., automobiles, refrigerators, televisions). Goods like food and clothing, which are consumed immediately or over a short period, are classified as non-durable (or semi-durable) consumer goods. - Statement 2 is Correct: Similar to capital goods, consumer durables have a long useful life and undergo wear and tear (depreciation) over time. Consequently, they require repairs, maintenance, and eventual replacement. However, unlike capital goods, they are used for final consumption by households rather than for aiding production processes. - Statement 3 is Correct: In National Income Accounting, consumer durables are treated as final goods because they are purchased for final consumption by households. They have crossed the production boundary and are not used as intermediate inputs to produce other goods. Key Takeaway: Consumer durables are final consumption goods with a long lifespan that undergo depreciation, distinct from non-durable goods (immediate consumption) and capital goods (production assets).

NCERT Class 12 Economics — Chapter 4: National Income Accounting

mcqeasy

Consider the following statements regarding 'Consumer Durables':

They are goods like food and clothing that are extinguished by immediate consumption.
Like capital goods, they undergo wear and tear and need repairs or replacement.
They are considered final goods in national income accounting.

Which of the statements given above is/are correct?

Official previous-year question

Verified 1 Aug 2026.

Options

A2 and 3 only
B1 and 2 only
C2 only
D1, 2 and 3

Did you get this right?

Solution

The correct option is 2 and 3 only.

Explanation

Goods in an economy are classified based on their durability and end-use. Consumer goods are purchased for direct satisfaction of wants, whereas capital goods are used for the production of other goods and services.

Statement-wise Analysis

Statement 1 is Incorrect: Consumer durables are goods that are not extinguished by immediate consumption and have a relatively long lifespan (e.g., automobiles, refrigerators, televisions). Goods like food and clothing, which are consumed immediately or over a short period, are classified as non-durable (or semi-durable) consumer goods.
Statement 2 is Correct: Similar to capital goods, consumer durables have a long useful life and undergo wear and tear (depreciation) over time. Consequently, they require repairs, maintenance, and eventual replacement. However, unlike capital goods, they are used for final consumption by households rather than for aiding production processes.
Statement 3 is Correct: In National Income Accounting, consumer durables are treated as final goods because they are purchased for final consumption by households. They have crossed the production boundary and are not used as intermediate inputs to produce other goods.

Key Takeaway: Consumer durables are final consumption goods with a long lifespan that undergo depreciation, distinct from non-durable goods (immediate consumption) and capital goods (production assets).

Your note

More from Chapter 4: National Income Accounting

In the context of National Income aggregates, what does 'Private Income' include that 'Personal Income' does not?

hard

Consider the following statements regarding 'Nominal GDP' and 'Real GDP': 1. Nominal GDP is evaluated at current prevailing prices. 2. Real GDP is evaluated at current market prices. 3. If Real GDP changes, it implies a change in prices only. Which of the statements given above is/are correct?

easy

Which of the following is NOT a reason for the difference between CPI and GDP Deflator?

easy

What is the primary reason for deducting 'Imports' in the expenditure method of calculating GDP?

medium

easy

Keep practising Chapter 4: National Income Accounting

Work through every question from this NCERT chapter.

Browse all NCERT Class 12 Economics chapters

The correct option is 2 and 3 only.

Explanation

Statement-wise Analysis

Statement 1 is Incorrect: Consumer durables are goods that are not extinguished by immediate consumption and have a relatively long lifespan (e.g., automobiles, refrigerators, televisions). Goods like food and clothing, which are consumed immediately or over a short period, are classified as non-durable (or semi-durable) consumer goods.
Statement 2 is Correct: Similar to capital goods, consumer durables have a long useful life and undergo wear and tear (depreciation) over time. Consequently, they require repairs, maintenance, and eventual replacement. However, unlike capital goods, they are used for final consumption by households rather than for aiding production processes.
Statement 3 is Correct: In National Income Accounting, consumer durables are treated as final goods because they are purchased for final consumption by households. They have crossed the production boundary and are not used as intermediate inputs to produce other goods.