The most important determinant of consumption demand is household income. A consumption function describes the relation between consumption and income. The simplest consumption function assumes that consumption changes at a constant rate as income changes. Of course, even if income is zero, some consumption still takes place. Since this level of consumption is independent of income, it is called autonomous consumption. We can describe this function as:

C =C + cY

Source) Introductory macroeconomics; Chapter 4; page number 54

Statement 1 is incorrect. An article or product which is ready to be sold finally to the consumers for final use, and will not pass through any more stages of production or transformations is called a final good. Because once it has been sold it passes out of the active economic flow. It will not undergo any further transformation at the hands of any producer. It may, however, undergo transformation by the action of the ultimate purchaser. In fact many such final goods are transformed during their consumption. Example: Tea leaves. 

Statement 2 is incorrect. Most of the items that enter our kitchen are transformed through the process of cooking. But cooking at home is not an economic activity, even though the product involved undergoes transformation. Home cooked food is not sold to the market. However, if the same cooking or tea brewing was done in a restaurant where the cooked product would be sold to customers, then the same items, such as tea leaves, would cease to be final goods and would be counted as inputs to which economic value addition can take place. Thus it is not in the nature of the good but in the economic nature of its use that a good becomes a final good.

Source) Introductory Macroeconomics; Chapter 2; Page number 10

An intermediate good is a product used to produce a final good or finished product. Salt, Sugar, wood, steel all are examples of an intermediate good.

Intermediate goods are sold between industries for resale or the production of other goods. These goods are also called semi-finished products because they are used as inputs to become part of the finished product. Example: Sugar, salt etc can be used for the manufacturing of other food products.

Source) Introductory Macroeconomics; Chapter 2; Page number 10

Both the statements are correct. All the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods.

Some commodities like television sets, automobiles or home computers, although they are for ultimate consumption, have one characteristic in common with capital goods – they are also durable. That is, they are not extinguished by immediate or even short period consumption; they have a relatively long life as compared to articles such as food or even clothing. They also undergo wear and tear with gradual use and often need repairs and replacements of parts, i.e., like machines they also need to be preserved, maintained and renewed. That is why we call these goods consumer durables.

Source) Introductory Macroeconomics; Chapter 2; Page number 10

Statement 2 is correct. The term 'national income' refers to all the citizens of the country. Gross National Product is the total value of the total output or production of final goods and services produced by the nationals of a country during a given period of time, generally one year. In this case the income of all the residents and non-resident citizens of a country is included whereas the income of foreign nationals who reside within the geographical boundary of the country is excluded. This can be calculated from the GDP. 

GNP= GDP+ (Export-Import)

Statement 2 is incorrect. Net National Product is arrived after deducting depreciation from Gross National Product. Depreciation means wear and tear of goods produced. This deduction is done because of part of current produce goes to replace the depreciated parts of the products already produced. This part does not add value to current year's total produce. It is used to keep the products already produced intact. So, it is deducted.

Hence, Net National Product = GNP-Depreciation

Source) Introductory macroeconomics; Chapter 2; page number 17

There are three major methods of measuring national income. They are:

1. Product or output Method or production method or Value added method
2. Income method
3. Expenditure or consumption method

Source) Introductory macroeconomics; Chapter 2; page number 16

The term that is used to denote the net contribution made by a firm is called its value added. The raw materials that a firm buys from another firm which are completely used up in the process of production are called ‘intermediate goods’. Therefore the value added of a firm is, value of production of the firm – value of intermediate goods used by the firm.

Source) Introductory macroeconomics; Chapter 2; page number 17

In a modern economy, the currency is issued by the central bank which can be held by the public or by the commercial banks, and is called the ‘high-powered money’ or ‘reserve money’ or ‘monetary base’ as it acts as a basis for credit creation.

Reserve money = Currency in Circulation + Bankers’ Deposits with RBI + ‘Other’ Deposits with RBI

Source) Introductory macroeconomics; Chapter 3; Page number 38