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

question 68

Multiple Choice

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

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

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Definitions:

Articles of Incorporation

Official documents filed with a government body to legally document the creation of a corporation.

Directors' Power

The authority granted to the board of directors of a company to make decisions on behalf of the company within the scope of their roles.

Tender Offer

A financial term referring to a public bid by a person or company proposing to buy shares from shareholders of a public company at a specified price within a certain time.

Full Market Value

The highest price a willing buyer would pay and a willing seller would accept for an asset in an open and competitive market.