Suppose that in 2018, the producer price index increases by 1.5 percent. As a result, economists most likely will predict that
A)GDP will increase in 2019.
B)the producer price index will increase by more than 1.5 percent in 2019.
C)interest rates will decrease in the future.
D)the consumer price index will increase in the future.

Question

Quizplus · Accepted Answer

The producer price index (PPI) measures the average change over time in the selling prices received by domestic producers for their output. An increase in the PPI often precedes an increase in the consumer price index (CPI), as producers pass on higher costs to consumers. Therefore, if the PPI increases, economists might predict that the CPI will also increase in the future, reflecting higher consumer prices.

Suppose That in 2018, the Producer Price Index Increases by 1.5