Question

The prices of which of the following items are included in the PPI? Finished goods from producers and labor costs O Labor costs of producers Supplies, finished goods, intermediate goods, crude materials by producers

Answer 1

PPI ( Producer Price Index ) includes the prices of all types of goods i.e crude , intermediate as well as finished goods as it measures the average changes in the prices of the goods and services that are sold by the manufacturers and the producers.PPI consists of weighted index of the prices of goods and services in the wholesale market and measures the changes in these goods and services from the seller's perespective. It includes three levels which are as under :

First one is the PPI Commodity Index that indicates the average price change over a certain period of time for various commodities such as crued oil and coal.

Second one is the SOP i.e. PPI stage of processing that includes the goods which are in the manufacturing stage between the raw and the finished goods and are also sold to other manufacturers which then convert them into the final goods such as cotton , steel etc.

The third and the last level includes the finished goods that are finally sold to the consumers.when all the three levels are concluded , then and only we will get the exact value of PPI.

Thus , it is clear from the above three levels of PPI that it includes the prices of all the types of goods i.e. supplies , finished goods , intermediate goods and crued materials by the producers and hence option 3 is correct.