Which of the Following Statements Is TRUE

question 54

Multiple Choice

Which of the following statements is TRUE?

• A)The producer price index is just another term for the GDP deflator.
• B)Changes in the producer price index generally follow changes in the consumer price index.
• C)The producer price index measures the cost of a basket of goods typically purchased by producers.
• D)The producer price index shows how the cost of all purchases by urban families changes.

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Definitions:

Operating Activities

Activities directly related to the operation of the business, including production, sales, and delivery of the company's product.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue; often referred to as the "bottom line."

Indirect Method

A method used in cash flow statement preparation that adjusts net income for non-cash transactions, deferrals, and accruals.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset since it was put into use, reducing its book value.