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OPPORTUNITY COST: The highest valued alternative foregone in the pursuit of an activity. This is a hallmark of anything dealing with economics--and life for that matter--because any action that you take prevents you from doing something else. The ultimate source of opportunity cost is the pervasive problem of scarcity (unlimited wants and needs, but limited resources). Whenever limited resources are used to satisfy one want or need, there are an unlimited number of other wants and needs that remain unsatisfied. Herein lies the essence of opportunity cost. Doing one thing prevents doing another.
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                           WHOLESALE PRICE INDEX: An index of the prices paid by retail stores for the products they ultimately resell to consumers. The Wholesale Price Index (WPI) was the forerunner of the modern Producer Price Index (PPI) and was discontinued in 1978. Other noted price indexes used to track economic activity are the Consumer Price Index (CPI) and the GDP price deflator. The Wholesale Price Index (WPI) was first published in 1902, and was one of the more important economic indicators available to policy makers until it was replaced by the PPI in 1978. The change to Producer Price Index in 1978 reflected, as much as a name change, a change in focus of this index away from the limited wholesaler-to-retailer transaction to encompass all stages of production. While the WPI is no longer available, the family of producer price indexes provides a close counterpart in what is labeled the Finished Goods Price Index.The importance of the WPI rested with its ability to forewarn later changes in the Consumer Price Index (CPI) and inflation. The WPI's forecasting ability rested with the simply input-output relation for retail stores. In other words, the prices PAID BY retail stores for their inputs are largely passed along as prices CHARGED TO consumers buying these goods as outputs. An increase in the WPI resulting from higher input prices this month, is likely reflected in an increase in the CPI in future months. This forecasting ability was frequently useful for stabilization policies. Suppose, for example, that the Chairman of the Federal Reserve System wanted to prevent inflation. Even though the CPI and GDP price deflator were relatively stable, an increase in the WPI would have prompted the Chairman to initiate contractionary monetary policy, making a pre-emptive strike against inflation.
Recommended Citation:WHOLESALE PRICE INDEX, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: July 22, 2018].
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BEIGE MUNDORTLE
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Today, you are likely to spend a great deal of time looking for a downtown retail store wanting to buy either storage boxes for your family photos or a large, stuffed giraffe. Be on the lookout for the happiest person in the room.
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This isn't me! What am I?
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Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
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"You can't build a reputation on what you are going to do." -- Henry Ford, automaker
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VAT
Value Added Tax
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