Because Increases in Input Prices Eventually Make It to Consumers

question 58

Multiple Choice

Because increases in input prices eventually make it to consumers when they buy the final product, the PPI:

• A) is considered a good predictor of future consumer prices.
• B) is a lag variable for inflation.
• C) accounts for inflation before it reaches consumers, adjusting the CPI downward.
• D) accounts for inflation before it reaches consumers, adjusting the CPI upward.

---

Definitions:

Tax Records

Documents and files that pertain to the tax history of an individual or entity, including tax returns, payments, receipts, and other pertinent information.

Court

An institution that the government sets up to settle disputes through a legal process, providing a platform for the enforcement of laws and the administration of justice.

Reasonable Care

A legal standard that requires individuals to act with the degree of caution and concern for the safety of others that a reasonably prudent person would in similar circumstances.

Negligence Standard

A legal criterion used to evaluate whether a person's conduct lacks reasonable care, potentially leading to liability for damages caused by such carelessness.