Why Can Changes in the Producer Price Index (PPI)predict Changes

question 143

Multiple Choice

Why can changes in the producer price index (PPI) predict changes in the consumer price index (CPI) ?

• A)They are computed using the same market basket.
• B)Consumers and producers often buy the same goods.
• C)Producers often pass along price increases to consumers.
• D)Consumers pay what retailers charge.

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Definitions:

Divergent Thinking

A mental strategy or technique employed to produce innovative concepts by examining numerous potential answers.

Intrinsic Motivation

The drive to engage in activities for their own sake, out of interest or enjoyment, rather than for an external reward.

Intrinsic Motivation

Internal drive that propels someone to act or perform tasks without the need for external reward or recognition.

Framing Effect

A cognitive bias where people decide on options based on whether they are presented in a positive or negative way.