Which of the following statements is TRUE?
A)The producer price index is just another term for the GDP deflator.
B)Changes in the producer price index generally follow changes in the consumer price index.
C)The producer price index measures the cost of a basket of goods typically purchased by producers.
D)The producer price index shows how the cost of all purchases by urban families changes.

Question

Quizplus · Accepted Answer

The producer price index measures the cost of a basket of goods typically purchased by producers, such as raw materials and intermediate goods. It is different from the consumer price index, which measures the cost of goods and services purchased by consumers. The GDP deflator, on the other hand, measures the overall price level of all goods and services produced in an economy, including those purchased by producers and consumers. Therefore, statement A is false, statement B is not necessarily true, and statement D is incorrect.

Which of the Following Statements Is TRUE