The producer price index measures:
A)the prices consumers pay for final goods and services.
B)the prices firms pay for crude and intermediate materials as well as finished goods.
C)the prices the government pays for final goods and services.
D)none of the above.

Question

Quizplus · Accepted Answer

The producer price index (PPI) measures the average changes in prices received by domestic producers for their output. This includes prices for crude materials, intermediate goods, and finished goods. Therefore, the correct choice is B. Choice A is incorrect because the PPI does not measure the prices consumers pay for final goods and services. Choice C is incorrect because the PPI does not measure the prices the government pays for final goods and services. Choice D is incorrect because there is a correct answer.

The Producer Price Index Measures