Intermediate good

An intermediate good is like a puzzle piece that helps make a bigger picture. Imagine you are making a cake, but you don't have all the ingredients. If you have flour, sugar, and eggs, those are intermediate goods. They are not the finished cake, but they are important parts that help create it. Intermediate goods are things that are used to make other things, but they are not sold directly to people for their own use. They are like building blocks in a toy set that are needed to create different structures. So, when you look at the final product, you might not see the intermediate goods, but they played an important role in making it.