In Practice, the Three Measurements of Inflation, the CPI, PPI

question 6

Multiple Choice

In practice, the three measurements of inflation, the CPI, PPI, and GDP deflator:

• A) all closely track each other.
• B) are all positively correlated.
• C) all measure inflation, but focus on different parts of the economy.
• D) All of these statements are true.

---

Definitions:

Profit Center

A part of a company that directly contributes to its profit through its operations and management.

Direct Expense

Costs that can be directly attributed to the production of goods or services, such as raw materials or labor.

Cost Center

A division or department within a business to which costs can be allocated for accounting and budgeting purposes.

Indirect Expense

Costs not directly traceable to a specific cost object, such as overhead or administrative expenses, which support the operation of the business as a whole.