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The Producer Price Index (PPI) is a key tool for governments and businesses to make informed decisions, particularly in contract adjustments. When entering a long-term contract, buyers can protect themselves against future price fluctuations by including a contract-adjustment clause. These clauses allow for price adjustments in sales and purchase contracts, specifying future dollar amounts. This mechanism safeguards both buyers and sellers from economic uncertainties. The video tutorial focuses on how to effectively use PPI data to develop your own contract-adjustment clause, ensuring fair pricing over the duration of the agreement.