Select the best answer for each question, then click \"Next Question\" to contin

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Select the best answer for each question, then click "Next Question" to continue, or "Previous If you want to flag a question for later review, select the "Mark for review" button. . You must answer all questions before you can submit the exam for grading . To see a list of the questions you have answered (or still need to answer), click "Review My Answ . You can exit the exam at any point by clicking "Save & Exit" Your work will be saved, but your an return to the exam at a later date to complete and submit it for grading Question 15 of 50 : Select the best answer for the question 15. When a manufacturing company raises prices for its products, it's a reflection of a/an O A. increase in producer price index (PPI). O B. increase in balance of trade (BOT) c, decrease in balance of payments (BOP) in consumer prce index (CRI) OD decrease i

Explanation / Answer

The Producer Price Index (PPI) is a weighted index of prices measured at the wholesale, or producer level. The producer price index (PPI) is a family of indexes that measures the average change in selling prices received by domestic producers of goods and services over time. The PPI measures price changes from the perspective of the sellers/manufacturers. The Producer's Price Index provides analysts with information about the trends in prices at various stages of the production process. Thus a manufacturing company's raise in price of goods produced is linked directly with PPI. The balance of trade is the value of a country's exports minus its imports. It's the most significant component of the current account. It measures a country's net income earned on international assets. Exports are goods or services made domestically and sold to a foreigner. Imports are goods and services bought by a country's residents but made in a foreign country. It includes souvenirs purchased by tourists traveling abroad. Services provided while traveling, such as transportation, hotels, and meals, are also imports. When exports are larger than imports, it's a trade surplus. When exports are less than imports, it's a trade deficit. Thus increase in BoT leads to trade surplus which is a good sign of growing economy. The Consumer Price Index (CPI) is a "measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services." It indicates the cost of living for a consumer. What CPI can specifically identify is periods of inflation or deflation for consumers in their day-to-day living expenses. If there's inflation i.e when goods and services costs more then the CPI will rise over a short period of time. If the CPI declines, that means there's deflation, or a steady decrease in the prices of goods and services. The balance of payments ( BoP), of a country is the record of all economic transactions between the residents of the country and of the world in a particular period (over a quarter of a year or more commonly over a year). Balance of payment is a summary of statement of all monetary transactions between a country and rest of the world. These transactions are made by individuals, firms and government bodies. Thus the balance of payments includes all external visible and non-visible transactions of a country. Again increase or decrease in BoP is a measure of the economy’s health and international trade relations.

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