If we want to use a measure of inflation that foreshadows price changes before they affect prices at the retail level, we would base our measure of inflation on
A)the producer price index.
B)the consumer price index.
C)the GDP deflator.
D)the household price index.
E)the Baltic dry index.

Question

Quizplus · Accepted Answer

The producer price index measures the price changes of goods and services at the wholesale level, before they reach the retail level. It includes prices of materials, intermediate goods, and finished goods that are sold to other businesses or to the final consumer. Therefore, the producer price index is a better measure of inflation that foreshadows price changes before they affect prices at the retail level.

If We Want to Use a Measure of Inflation That