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12 June, 03:10

The consumer price index (CPI) and the producer price index (PPI) actually measure the same economic factors.

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  1. 12 June, 03:22
    0
    The statement is False.

    Explanation:

    First lets see what CPI and PPI are.

    Consumer price index measures the change in the average prices of consumer goods and Services. The weighted average price of a selected consumer market is used for this.

    Producers price index measures the changes in the prices of the output produced by the domestic producers.

    However, there are certain factors that these 2 indices include and do not include.

    CPI includes the sales and taxes paid for the products and services as they influence the consumers. however, PPI does not take in the sales and taxes. PPI is somewhat broader than the CPI: PPI considers the change in average prices of producers in USA while CPI only take in to account the goods and services consumed by the US Urban consumers. Because it is aimed at the consumers, CPI includes Imports. However, PPI does not include Imports.
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