Which of the following measures gives the earliest warning of increasing inflation?
A)the Consumer Price Index
B)the Producer Price Index
C)the GDP deflator
D)all of these should signal the same short-run inflation

Question

Quizplus · Accepted Answer

The Producer Price Index measures changes in the prices of goods and services at the wholesale level, and therefore can provide an earlier indication of potential inflationary pressures in the economy. The Consumer Price Index and the GDP deflator are useful for tracking changes in consumer prices and overall price levels, but may not provide as early of a warning as the Producer Price Index.

Which of the Following Measures Gives the Earliest Warning of Increasing