Which of the Following Measures Gives the Earliest Warning of Increasing

question 91

Multiple Choice

Which of the following measures gives the earliest warning of increasing inflation?

• A)the Consumer Price Index
• B)the Producer Price Index
• C)the GDP deflator
• D)all of these should signal the same short-run inflation

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Definitions:

Temporary Accounts

These are accounts that are closed at the end of each accounting period, including revenues, expenses, dividends, and income summary accounts, to prepare the company for a new accounting period.

Retained Earnings

The portion of net income not distributed as dividends but retained by the company to reinvest in its business or to pay debt.

Accounting Period

A specific duration of time for which financial statements are prepared, often annually, quarterly, or monthly, to measure financial performance.

Adjusted Trial Balance

An inventory of all accounts with their adjusted balances, utilized to compile financial statements.