To evaluate the impact of inflation, the government uses

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When evaluating the impact of inflation, governments and statisticians rely on price measures to gauge changes in the cost of living and production inputs.
Option 1: 'the consumer price index (CPI) and producer price index (PPI).' These indexes track changes in prices at the consumer and wholesale/production levels, respectively, and are standard tools for assessing inflationary trends.
Option 2: 'monetary policy and fiscal policy.' While policy tools influence inflation, they are not measurement indexes; they are instruments used to influence inflation rather than direct metrics of price level changes.
Option 3: 'inflation and deflation.' These terms describe phenomena (rising vs falling price levels) rather than measurement tools; they are outcomes, not the evaluative instruments used to gauge inflation.
Option 4: 'productivity and unemployment.' These are economic indicators related to output and labor market conditions, not price-level measurements; they imply broader economic health but do not directly quantify inflation.
Thus, the most appropriate measurement tools for tracking inflation are price indexes such as the CPI and PPI, which capture consumer-level and producer-level price changes respectively.

SMC 2025 Spr - BUS 1 (1318,4037) - Introduction to Business (G) BUSN Exam 1, Chapters 1-3

To evaluate the impact of inflation, the government uses

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