The Fed prefers to focus on inflation based on which price index?
A)personal consumption expenditures price index
B)consumer price index
C)GDP deflator
D)producer price index

Question

Quizplus · Accepted Answer

The Fed prefers to focus on the personal consumption expenditures price index (PCE) because it is a broader measure of prices and includes a wider range of goods and services than the consumer price index (CPI). Additionally, the PCE is considered to be a better indicator of consumer behavior as it takes into account changes in consumption patterns.

The Fed Prefers to Focus on Inflation Based on Which