The statistical measure of a weighted average of prices of goods and services that firms produce and sell is known as
A) the inflation rate.
B) the consumer price index (CPI).
C) the producer price index (PPI).
D) the Gross Domestic Product (GDP) deflator.

Question

Quizplus · Accepted Answer

The definition provided in the question is a clear description of the Producer Price Index (PPI). The PPI measures the changes in prices that producers receive for their goods and services. Option A is incorrect because the inflation rate is a measure of the rate of increase in prices across all goods and services in an economy. Option B is incorrect because the Consumer Price Index (CPI) measures the changes in prices of a basket of goods and services typically purchased by households. Option D is incorrect because the Gross Domestic Product (GDP) deflator measures the level of prices for all final goods and services produced within an economy, regardless of who produced them.

The Statistical Measure of a Weighted Average of Prices of Goods