Which Statement About the PPI Is True

question 31

Multiple Choice

Which statement about the PPI is true?

• A) The PPI is a good predictor of future consumer prices because increases in input prices eventually make it back to consumers.
• B) The PPI is more stable than the CPI over time.
• C) The PPI only measures the changes of input prices for firms that manufacture goods abroad.
• D) The PPI is the main indicator used by the Federal Reserve to track changes in the price level.

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Definitions:

Dividends in Arrears

Unpaid dividends on cumulative preferred stock that must be paid out before any dividends can be distributed to common stockholders.

Cumulative Preferred Stock

A type of preferred stock that entitles the holder to receive dividends in arrears before common stockholders can receive any dividends.

Liability

Any financial obligation or debt that an entity is responsible for paying to another party.

Current Asset

An asset expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.