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. accounts for inflation before it reaches consumers, adjusting the CPI downward.
C. is a lag variable for inflation.
D. accounts for inflation before it reaches consumers, adjusting the CPI upward.
Answer: A
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Short-run movements along the Phillips curve
a. remind us of the dangers of confusing various types of unemployment b. may determine long-run shifts of the same curve c. are usually brief and dramatic d. respond to different assumptions about consumer confidence e. lead to long-run movements along the same curve
Scale economies help explain why products are produced in a limited number of varieties in a country.
Answer the following statement true (T) or false (F)
Macroeconomics is the study of individual economic markets.
Answer the following statement true (T) or false (F)
A firm's short-run supply curve is its marginal cost curve above its average total cost curve.
Answer the following statement true (T) or false (F)