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Consider the following statements with respect to Purchasing Managers Index (PMI):
1. PMI is an indicator of manufacturing activity only
2. It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before
Which of the following given below codes are correct?
1. PMI is an indicator of manufacturing activity only
2. It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before
Which of the following given below codes are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
Consider the following statements with respect to Purchasing Managers ...
Started in 1948 by the US-based Institute of Supply Management, the Purchasing Managers‘ Index, or PMI, has now become one of the most closely watched indicators of business activity across the world. PMI or a Purchasing Managers‘ Index (PMI) is an indicator of business activity-both in the manufacturing and services sectors. It is a surveybased measure that asks the respondents about changes in their perception of some key business variables from the month before. It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
Most Upvoted Answer
Consider the following statements with respect to Purchasing Managers ...
The correct answer is option 'B', which means that only statement 2 is correct. Let's discuss the statements in detail:
1. PMI is an indicator of manufacturing activity only: This statement is incorrect. The Purchasing Managers Index (PMI) is not limited to measuring manufacturing activity alone. It is a broad-based indicator that measures the economic health of the manufacturing sector as well as the services sector. PMI provides valuable insights into the overall economic activity by considering factors such as new orders, production, employment, supplier deliveries, and inventories. Therefore, it is not limited to manufacturing activity alone.
2. It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before: This statement is correct. PMI is a survey-based measure that relies on the responses of purchasing managers in various sectors of the economy. These managers are asked about changes in key business variables such as new orders, production, employment, supplier deliveries, and inventories compared to the previous month. The responses are then compiled and used to calculate the PMI, which provides an indication of the health of the economy. By capturing the sentiment and expectations of purchasing managers, PMI serves as an early indicator of economic trends.
In summary, while statement 2 is correct, statement 1 is incorrect. PMI is not limited to measuring manufacturing activity alone; it provides insights into the overall economic activity by considering both the manufacturing and services sectors. Furthermore, PMI is a survey-based measure that captures changes in key business variables based on the responses of purchasing managers.
1. PMI is an indicator of manufacturing activity only: This statement is incorrect. The Purchasing Managers Index (PMI) is not limited to measuring manufacturing activity alone. It is a broad-based indicator that measures the economic health of the manufacturing sector as well as the services sector. PMI provides valuable insights into the overall economic activity by considering factors such as new orders, production, employment, supplier deliveries, and inventories. Therefore, it is not limited to manufacturing activity alone.
2. It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before: This statement is correct. PMI is a survey-based measure that relies on the responses of purchasing managers in various sectors of the economy. These managers are asked about changes in key business variables such as new orders, production, employment, supplier deliveries, and inventories compared to the previous month. The responses are then compiled and used to calculate the PMI, which provides an indication of the health of the economy. By capturing the sentiment and expectations of purchasing managers, PMI serves as an early indicator of economic trends.
In summary, while statement 2 is correct, statement 1 is incorrect. PMI is not limited to measuring manufacturing activity alone; it provides insights into the overall economic activity by considering both the manufacturing and services sectors. Furthermore, PMI is a survey-based measure that captures changes in key business variables based on the responses of purchasing managers.
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Consider the following statements with respect to Purchasing Managers Index (PMI):1. PMI is an indicator of manufacturing activity only2. It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month beforeWhich of the following given below codes are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'B'. Can you explain this answer?
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