Economics Consumer Price Index Cpi Questions
The Consumer Price Index (CPI) and the Producer Price Index (PPI) are both measures of inflation, but they differ in terms of what they measure and who they represent.
The CPI measures changes in the average prices of a basket of goods and services purchased by households. It reflects the price changes that consumers experience in their day-to-day lives and is used to calculate the inflation rate for consumers.
On the other hand, the PPI measures changes in the average prices received by producers for their goods and services. It reflects the price changes at the producer level and is used to track inflationary pressures in the production process. The PPI includes prices of raw materials, intermediate goods, and finished goods.
In summary, the CPI measures changes in consumer prices, while the PPI measures changes in producer prices.