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Explain the difference between the CPI and PPI. Is one more important than the other?

Explain the difference between the CPI and PPI. Is one more important than the other?

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Answer #1

both The consumer price index (CPI), and the producer price index (PPI), are economic indicators that measures price fluctuations for goods and services.CPI  calculates the change in cost on a bundle of consumer goods and services over time.  A higher price indicates a decrease in consumer purchases and a rise in inflation. whereas PPI  measures the average change in the sale prices for the domestic market of raw goods and services.

yes PPI is more important than the CPI because The PPI serves as a true measure of output, it is not affected by consumer demand.

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