ENTREPRENEURIAL PLANNING
FINANCIAL PLANNING AND ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Firm Price Index
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Consumer Price Index
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Producer Price Index
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Government Price Index
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Detailed explanation-1: -There are two inflationary measures in our economy, the Consumer Price Index (CPI) and the Producer Price Index (PPI). CPI is a measure of the total value of goods and services consumers have bought over a specified period, while PPI is a measure of inflation from the perspective of producers.
Detailed explanation-2: -The CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy.
Detailed explanation-3: -The CPI includes imports; the PPI does not. The second fundamental difference between the indexes is what is included in the price. In the producer price index, sales and taxes are not included for the producer’s returns because these factors do not directly benefit the producer.