The PPI Is Considered a Good Predictor of Future Consumer

question 24

Multiple Choice

The PPI is considered a good predictor of future consumer prices because increases in input prices:

• A) eventually make it to consumers when they buy the final product.
• B) are accounted for in the PPI, which then automatically adjusts the CPI.
• C) tend to immediately translate into changes in the wage rate.
• D) are used by consumers to make purchasing decisions.

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Definitions:

Asset

An economic resource owned or controlled by an individual or company, expected to provide future benefits.

Liability

A financial obligation or debt owed by a business to an external entity that must be repaid.

Accounts Payable

A current liability account that represents amounts owed by a business to creditors for purchases or services received.

Office Supplies

Items such as pens, paper, and other materials used for daily operations in an office setting.