ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Producer Price Index or PPI is an index that measures the average price change received by the producer excluding the indirect taxes. The Wholesale Price Index represents the price change of a basket of goods and includes some taxes levied.

Detailed explanation-2: -The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services.

Detailed explanation-3: -PPIs measure price change from the perspective of the seller. This contrasts with other measures, such as the Consumer Price Index (CPI), that measure price change from the purchaser’s perspective. Sellers’ and purchasers’ prices may differ due to government subsidies, sales and excise taxes, and distribution costs.

Detailed explanation-4: -The Producer Price Index (PPI) measures the average change in prices U.S. producers receive for the sale of their products. Since tariffs and taxes are not retained by producers as revenue, they are explicitly excluded from the PPI.

Detailed explanation-5: -The Wholesale Price Index focuses on the price of goods traded between corporations, rather than the goods bought by consumers, which is measured by the Consumer Price Index. The purpose of the WPI is to monitor price movements that reflect supply and demand in industry, manufacturing and construction.