You should get all the answers right. Don\'t answer if you are unsure and wanna

Question

You should get all the answers right. Don't answer if you are unsure and wanna give it a shot. It is very important for me to get them right. Thank you.

Please indicate whether the following statements are true or false as they relate to the producer price index (PPI) by selecting the appropriate label. Each label will be used more than once. Statement 1: PPl measures the average change in the selling price that domestic producers receive for their output during a given time period. Statement 2: PPI was formerly known as the wholesale-retail price index Statement 3: PPl is not a leading indicator of the consumer price index (CPI). Statement 4: For many products, the price from the very first business transaction involving that product is included in the PP Statement 5: PPl is comprised of a solitary price index False Label each statement according to whether it describes the Consumer Price Index (CPI) or GDP deflator Statements may describe one, both, or neither of the terms. If both labels apply, place both in the box. If neither applies, leave the box blank Is equal to 100 for the base year Is based on commonly used consumer goods only Includes the quantity and price of forklifts produced. Equals nominal GDP divided by real GDP, multiplied by 100 Uses the same prices for GDP doflator CPI s in the market basket and adjusts the quantities to reflect changes over time Is subject to biases because it does not reflect changes in buying patterns. Uses a fixed quantity of goods (updated once in a while)

Explanation / Answer

Part 1.

Statement 1. True. PPI meausres the average change in selling prices over time that the domestic producers receieve.

2. True. PPI was formerly known as WPI.

3. False. The PPI serves as a leading indicator of CPI.

4. True.

5. False. PPI is a family of indexes.

Part 2.

1. For the base year, the CPI is equal to 100.

2. CPI is based on commodities used consumer goods only.

3. GDP deflator includes the quantity and prices of forklifts peoduced.

4 GDP deflator euqals nominal gdp divided by read gdp multiplied by 100.

5. CPI uses the same prices for goods in the narket basket and adjusta quantitues over time.

6. CPI is subject to biases because it does not reflect changes in buying patterns.

7. CPI uses a fixed basket of goods.

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