The Producer Price Index Is Considered a Good Predictor of Future

question 41

Multiple Choice

The producer price index is considered a good predictor of future consumer prices because:

• A)increases in input prices eventually make it to consumers when they buy the final product.
• B)increases in input prices are accounted for in PPI,and therefore this automatically adjusts the CPI.
• C)increases in input prices are observed first in the PPI,adjusting the CPI downward.
• D)None of these statements is true.

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