Question 1

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below.   What is Paasche's price index?

Accepted Answer

A)  98.4 
B)  107.0 
C)  108.0 
D)  117.5 
E)  115.6 
A)  98.4 
B)  107.0 
C)  108.0 
D)  117.5 
E)  115.6

Question 2

Sean McCarthy earns $20,000 a year; John Nowak, $35,000. What is John's income as an index using Sean's income as the base?

Accepted Answer

A)  157.1 
B)  75.0 
C)  100.0 
D)  57.1 
E)  175.0 
A)  157.1 
B)  75.0 
C)  100.0 
D)  57.1 
E)  175.0

Question 3

Real income is computed by:

Accepted Answer

A)  dividing money income by the CPI and multiplying by 100. 
B)  dividing the CPI by money income and multiplying by 100. 
C)  multiplying money income by the CPI. 
D)  subtracting the CPI from money income. 
E)  dividing a dollar by the CPI and multiplying by 100. 
A)  dividing money income by the CPI and multiplying by 100. 
B)  dividing the CPI by money income and multiplying by 100. 
C)  multiplying money income by the CPI. 
D)  subtracting the CPI from money income. 
E)  dividing a dollar by the CPI and multiplying by 100.

Question 4

i. Social security, old-age pensions, many apartment leases and many labor contracts are tied to the change in the CPI.
Ii) Millions of employees in automobile, steel and other industries have their wages adjusted upward when the CPI increases. The specifics are in the management-union contracts. These clauses in the contracts are referred to as "cola clauses."
Iii) If two or more series of index numbers have the same year as the base period, then they can be compared directly.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Question 5

An index of clothing prices for 2008 based on 1998 is to be constructed. The clothing items considered are shoes and dresses. The information for prices and quantities for both years is given below. Use 1998 as the base period and 100 as the base value.   Determine the Aggregate price index for 2008.

Accepted Answer

A)  111.8 
B)  112.9 
C)  113.3 
D)  112.5 
E)  113.0 
A)  111.8 
B)  112.9 
C)  113.3 
D)  112.5 
E)  113.0

Question 6

An index of clothing prices for 2008 based on 1998 is to be constructed. The clothing items considered are shoes and dresses. The information for prices and quantities for both years is given below. Use 1998 as the base period and 100 as the base value.   Determine the Paasche price index for 2008.

Accepted Answer

A)  111.8 
B)  112.9 
C)  113.3 
D)  112.5 
E)  113.0 
A)  111.8 
B)  112.9 
C)  113.3 
D)  112.5 
E)  113.0

Question 7

i. Etienne Laspeyres developed a method in the latter part of the 18th century to determine a weighted index using base-period weights.
Ii) If we are constructing a weighted index of the price of food for 2000 using the Laspeyres' method and 1982-84 = 100, we use the amounts consumed in the base period, q0, as weights.
Iii) The Laspeyres' method changes in buying patterns over time.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Question 8

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are:   What was Jon's real income in 2007?

Accepted Answer

A)  $34,046.69 
B)  $58,295.96 
C)  $39,650.00 
D)  $36,950.67 
E)  $41,200.00 
A)  $34,046.69 
B)  $58,295.96 
C)  $39,650.00 
D)  $36,950.67 
E)  $41,200.00

Question 9

The following table shows the average earnings by gender of Canadian workers.   The changes in earnings for men and women are to be compared. Unfortunately, the base period of 1998 is different for the two groups.
Determine the average earnings increase for both men and women over the period 1998 to 2002.

Accepted Answer

A)  Women's earnings increased by 12.1% and men's earnings increased by 12.0% 
B)  Women's earnings increased by 7.9% and men's earnings increased by 9.9% 
C)  Women's earnings increased by 9.6% and men's earnings increased by 10.4% 
D)  Women's earnings increased by 9.6% and men's earnings decreased by 10.4% 
E)  Women's earnings increased by 5.9% and men's earnings increased by 4.0% 
A)  Women's earnings increased by 12.1% and men's earnings increased by 12.0% 
B)  Women's earnings increased by 7.9% and men's earnings increased by 9.9% 
C)  Women's earnings increased by 9.6% and men's earnings increased by 10.4% 
D)  Women's earnings increased by 9.6% and men's earnings decreased by 10.4% 
E)  Women's earnings increased by 5.9% and men's earnings increased by 4.0%

Question 10

The following table shows the average earnings by gender of Canadian workers.   The changes in earnings for men and women are to be compared. Unfortunately, the base period of 1998 is different for the two groups.
Determine the average earnings increase for both men and women over the period 1998 to 2004.

Accepted Answer

A)  Women's earnings increased by 5.9% and men's earnings increased by 4.0% 
B)  Women's earnings increased by 7.9% and men's earnings increased by 9.9% 
C)  Women's earnings increased by 9.6% and men's earnings increased by 11.4% 
D)  Women's earnings increased by 9.6% and men's earnings increased by 10.4% 
E)  Women's earnings increased by 12.6% and men's earnings increased by 10.4% 
A)  Women's earnings increased by 5.9% and men's earnings increased by 4.0% 
B)  Women's earnings increased by 7.9% and men's earnings increased by 9.9% 
C)  Women's earnings increased by 9.6% and men's earnings increased by 11.4% 
D)  Women's earnings increased by 9.6% and men's earnings increased by 10.4% 
E)  Women's earnings increased by 12.6% and men's earnings increased by 10.4%

Question 11

i. Etienne Laspeyres developed a method in the latter part of the 18th century to determine a weighted index using base-period weights.
Ii) If we are constructing a weighted index of the price of food for 2000 using the Laspeyres' method and 1982-84 = 100, we use the amounts consumed in the base period, q0, as weights.
Iii) The Laspeyres' method allows for a meaningful comparison of prices over time; however, if does not reflect changes in buying patterns over time.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Question 12

An index of clothing prices for 2000 based on 1983 is to be constructed. The prices for 1983 and 2000 and the quantity consumed in 1983 are shown below.   Assuming that the number sold remained constant, i.e., the same number were sold in 2000 as in 1983, what is the weighted index of price for 2000 using 1983 as the base?

Accepted Answer

A)  206.7 
B)  214.5 
C)  48.4 
D)  46.6 
E)  240.0 
A)  206.7 
B)  214.5 
C)  48.4 
D)  46.6 
E)  240.0

Question 13

i. Besides measuring change in the prices of goods and services, the consumer price indexes have a number of other applications. The CPI is used to determine real disposable personal income, deflate sales or other series, find the purchasing power of the dollar and establish cost of living increases.
Ii) The concept of real income is sometimes called deflated income or income expressed in constant dollars and the CPI is called the deflator.
Iii) To deflate sales, the actual sales are multiplied by the wholesale price index and the result multiplied by 100.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Question 14

i. An index is a convenient way of comparing changes for different variables, i.e., average income and food prices.
Ii) No systematic approach to collecting and reporting data in index form was evident in North
America until about 1900.
Iii) The CPI can be used in determining "real" income.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Question 15

i. An index number is a percent that measures the change in price, quantity, value, or some other item of interest from one time to another.
Ii) An index of 239.2 and an index of 86.4 are actually percents.
Iii) All indexes have the same base, namely 1982-84, written 1982 - 84 = 100.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Question 16

The Consumer Price Index in June 1998 was 248.4 (1982-84 = 100). What does this indicate about prices from 1982-84 to June 1998?

Accepted Answer

A)  Rose 248.4% 
B)  Rose 548.4% 
C)  Rose 148.4% 
D)  Declined 148.4% 
E)  Declined 248.4% 
A)  Rose 248.4% 
B)  Rose 548.4% 
C)  Rose 148.4% 
D)  Declined 148.4% 
E)  Declined 248.4%

Question 17

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below.   What is the interpretation of Laspeyres' price index?

Accepted Answer

A)  Prices rose 98.4%B. Prices declined 1.6% 
B)  Prices rose 7.0% 
C)  Prices rose 8.0% 
D)  Prices rose 15.6% 
A)  Prices rose 98.4%B. Prices declined 1.6% 
B)  Prices rose 7.0% 
C)  Prices rose 8.0% 
D)  Prices rose 15.6%

Question 18

Prices and the number produced for selected agricultural items are:   Using the Laspeyres method, what is the price index for these items for 2000 (1980 = 100)?

Accepted Answer

A)  42.5 
B)  257.5 
C)  127.9 
D)  85.3 
E)  117.1 
A)  42.5 
B)  257.5 
C)  127.9 
D)  85.3 
E)  117.1

Question 19

Listed below are the top-steel producing nations, in millions of tonnes, for the year 2004. Express the amount produced by China, the European Union, Japan, and Russia as an index, using the United
States as a base. What percent more steel does the European Union produce than the United States?

Accepted Answer

A)  184.6 
B)  84.6 
C)  15.4 
D)  52.6 
E)  47.4 
A)  184.6 
B)  84.6 
C)  15.4 
D)  52.6 
E)  47.4

Question 20

i. The Consumer Price Index measures the change in prices of a fixed market basket of goods and services from one period to another. 
ii. The CPI is not just one index, but includes a large number of groups, subgroups and selected items, such as a food index, a transportation index and a shelter index.
Iii) The Consumer Price Index is based on more than 600 separate goods and services used by most urban and rural families.

Accepted Answer

A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false 
A)  (i), (ii) and (iii) are all correct statements 
B)  (i) and (ii) are correct statements, but not (iii). 
C)  (i) and (iii) are correct statements but not (ii). 
D)  (ii) and (iii) are correct statements but not (i). 
E)  All statements are false

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. What is Paasche's price index?

Sean McCarthy earns $20,000 a year; John Nowak, $35,000. What is John's income as an index using Sean's income as the base?

Real income is computed by:

An index of clothing prices for 2008 based on 1998 is to be constructed. The clothing items considered are shoes and dresses. The information for prices and quantities for both years is given below. Use 1998 as the base period and 100 as the base value. Determine the Aggregate price index for 2008.

An index of clothing prices for 2008 based on 1998 is to be constructed. The clothing items considered are shoes and dresses. The information for prices and quantities for both years is given below. Use 1998 as the base period and 100 as the base value. Determine the Paasche price index for 2008.

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are: What was Jon's real income in 2007?

i. An index is a convenient way of comparing changes for different variables, i.e., average income and food prices. Ii) No systematic approach to collecting and reporting data in index form was evident in North America until about 1900. Iii) The CPI can be used in determining "real" income.

i. An index number is a percent that measures the change in price, quantity, value, or some other item of interest from one time to another. Ii) An index of 239.2 and an index of 86.4 are actually percents. Iii) All indexes have the same base, namely 1982-84, written 1982 - 84 = 100.

The Consumer Price Index in June 1998 was 248.4 (1982-84 = 100). What does this indicate about prices from 1982-84 to June 1998?

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. What is the interpretation of Laspeyres' price index?

Prices and the number produced for selected agricultural items are: Using the Laspeyres method, what is the price index for these items for 2000 (1980 = 100)?

Listed below are the top-steel producing nations, in millions of tonnes, for the year 2004. Express the amount produced by China, the European Union, Japan, and Russia as an index, using the United States as a base. What percent more steel does the European Union produce than the United States?

What Is Statistics

Describing Data: Frequency Distributions and Graphic Presentation

Describing Data: Numerical Measures

A Survey of Probability Concepts

Discrete Probability Distributions

The Normal Probability Distribution

Sampling Methods and the Central Limit Theorem

Estimation and Confidence Intervals

One-Sample Tests of a Hypothesis

Two-Sample Tests of Hypothesis

Analysis of Variance

Linear Regression and Correlation

Multiple Regression and Correlation Analysis

Chi-Square Applications for Nominal Data

Time Series and Forecasting

An Introduction to Decision Theory

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Exam 15: Index Numbers

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. What is Paasche's price index?

Sean McCarthy earns $20,000 a year; John Nowak, $35,000. What is John's income as an index using Sean's income as the base?

Real income is computed by:

An index of clothing prices for 2008 based on 1998 is to be constructed. The clothing items considered are shoes and dresses. The information for prices and quantities for both years is given below. Use 1998 as the base period and 100 as the base value. Determine the Aggregate price index for 2008.

An index of clothing prices for 2008 based on 1998 is to be constructed. The clothing items considered are shoes and dresses. The information for prices and quantities for both years is given below. Use 1998 as the base period and 100 as the base value. Determine the Paasche price index for 2008.

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are: What was Jon's real income in 2007?

i. An index is a convenient way of comparing changes for different variables, i.e., average income and food prices. Ii) No systematic approach to collecting and reporting data in index form was evident in North America until about 1900. Iii) The CPI can be used in determining "real" income.

i. An index number is a percent that measures the change in price, quantity, value, or some other item of interest from one time to another. Ii) An index of 239.2 and an index of 86.4 are actually percents. Iii) All indexes have the same base, namely 1982-84, written 1982 - 84 = 100.

The Consumer Price Index in June 1998 was 248.4 (1982-84 = 100). What does this indicate about prices from 1982-84 to June 1998?

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. What is the interpretation of Laspeyres' price index?

Prices and the number produced for selected agricultural items are: Using the Laspeyres method, what is the price index for these items for 2000 (1980 = 100)?

Listed below are the top-steel producing nations, in millions of tonnes, for the year 2004. Express the amount produced by China, the European Union, Japan, and Russia as an index, using the United States as a base. What percent more steel does the European Union produce than the United States?

What Is Statistics

Describing Data: Frequency Distributions and Graphic Presentation

Describing Data: Numerical Measures

A Survey of Probability Concepts

Discrete Probability Distributions

The Normal Probability Distribution

Sampling Methods and the Central Limit Theorem

Estimation and Confidence Intervals

One-Sample Tests of a Hypothesis

Two-Sample Tests of Hypothesis

Analysis of Variance

Linear Regression and Correlation

Multiple Regression and Correlation Analysis

Chi-Square Applications for Nominal Data

Time Series and Forecasting

An Introduction to Decision Theory

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