The producer price index is often regarded as a warning sign of inflation because:
A)commodity producers are relatively quick to raise prices.
B)producers are likely to have monopoly control over prices.
C)consumers have to pay the prices charged.
D)commodity producers can sell whatever they want at higher prices.

Question

Quizplus · Accepted Answer

The producer price index measures the average change in prices received by domestic producers for their outputs, and commodity producers are relatively quick to raise prices in response to changes in market conditions. As a result, an increase in the producer price index can be a warning sign of rising inflationary pressures.

The Producer Price Index Is Often Regarded as a Warning