Question 1

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)  $59,880.00 
D)  $72,475.00 
E)  $57,988.24 
A)  $34,046.69 
B)  $58,295.96 
C)  $59,880.00 
D)  $72,475.00 
E)  $57,988.24

Question 2

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below.   What is the unweighted aggregate price index?

Accepted Answer

A)  98.4 
B)  107.0 
C)  117.5 
D)  128.8 
E)  88.9 
A)  98.4 
B)  107.0 
C)  117.5 
D)  128.8 
E)  88.9

Question 3

How is the purchasing power of the dollar computed?

Accepted Answer

A)  ($1/CPI) (100) 
B)  ($1 - CPI) (100) 
C)  ($1 x CPI) (100) 
D)  (CPI/$1) (100) 
E)  ($1 + CPI) (100) 
A)  ($1/CPI) (100) 
B)  ($1 - CPI) (100) 
C)  ($1 x CPI) (100) 
D)  (CPI/$1) (100) 
E)  ($1 + CPI) (100)

Question 4

i. 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."
Ii) When two or more series of index numbers to be compared do not have the same base period, we select a common base period for all series. Then we use the respective base numbers as the denominators and convert each base to the new base.
Iii) The largest component of the Canadian CPI is Food.

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

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 Japan produce than the United States?

Accepted Answer

A)  184.6 
B)  84.6 
C)  15.4 
D)  52.6 
E)  32.1 
A)  184.6 
B)  84.6 
C)  15.4 
D)  52.6 
E)  32.1

Question 6

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 price of food 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 7

What component(s) does the CPI include?

Accepted Answer

A)  Recreation and Education. 
B)  Food. 
C)  Sheltered. 
D)  Clothing 
E)  All of the choices are correct 
A)  Recreation and Education. 
B)  Food. 
C)  Sheltered. 
D)  Clothing 
E)  All of the choices are correct

Question 8

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 Fisher's ideal 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 9

The CPI for "personal computers and peripheral equipment" in July of 2001 was 29.3 (1982-1984 = 100). Interpret this index.

Accepted Answer

A)  There was no significant increase in the price of "personal computers and peripheral equipment" 
B)  The price of "personal computers and peripheral equipment" increased 29.3%. 
C)  The price of "personal computers and peripheral equipment" decreased 70.7%. DIf the average price of a computer in 1982-1984 was $879.00, the CPI for "personal computers and 
D)  peripheral equipment" would predict that the price of a computer in July 2001 would be $3,000.00. 
E)  The price of "personal computers and peripheral equipment" decreased 29.3%. 
A)  There was no significant increase in the price of "personal computers and peripheral equipment" 
B)  The price of "personal computers and peripheral equipment" increased 29.3%. 
C)  The price of "personal computers and peripheral equipment" decreased 70.7%. DIf the average price of a computer in 1982-1984 was $879.00, the CPI for "personal computers and 
D)  peripheral equipment" would predict that the price of a computer in July 2001 would be $3,000.00. 
E)  The price of "personal computers and peripheral equipment" decreased 29.3%.

Question 10

i. 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.
Ii) The Consumer Price Index is based on more than 600 separate goods and services used by most urban and rural families.
Iii) One function of CPI is to allow consumers to determine the degree to which their purchasing power is being eroded by price increases and as such, it is a metrestick for revising wages, pensions and other income payments to keep pace with changes in prices.

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 11

i. An index is a convenient way of comparing changes for different variables, i.e., average income and food prices.
Ii) The concept of real income is sometimes called deflated income.
Iii) Purchasing power of the dollar is determined by finding the inverse of the CPI

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

i. To deflate sales, the actual sales are multiplied by the wholesale price index and the result multiplied by 100.
Ii) The CPI serves only one major function: as an economic indicator of the rate of inflation.
Iii) To construct a special-purpose index designed to measure general business activity, the weights are based on the judgments of the statistician and assigned to each series.

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)  (iii) is a correct statement, but not (i) or (ii). 
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)  (iii) is a correct statement, but not (i) or (ii). 
E)  All statements are false

Question 13

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below.   What is Laspeyres' 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 14

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 simple average of the price indexes.   
 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 simple average of the price indexes.

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 15

As chief statistician for the municipality, you want to compute and publish every year a special- purpose index, which you plan to call Index of Municipal Business Activity. Three series seem to hold promise as the basis for the index; namely, the price of wheat, the number of new automobiles sold and the rate of money turnover for the municipality (published by a local bank). Arbitrarily you decide that money turnover should have a weight of 60 percent; number of new automobiles sold, 30 percent; and the price of wheat, 10 percent.   What is the Index of Municipal Business Activity for 1981 (the base year) and for 2000?

Accepted Answer

A)  100 for 1981, 139 for 2000 
B)  139 for 1981, 100 for 2000 
C)  100 for 1981, 61 for 2000 
D)  100 for 1981, 100 for 2000 
E)  100 for 1981, 160 for 2000 
A)  100 for 1981, 139 for 2000 
B)  139 for 1981, 100 for 2000 
C)  100 for 1981, 61 for 2000 
D)  100 for 1981, 100 for 2000 
E)  100 for 1981, 160 for 2000

Question 16

An index number is a percent that can measure the change from one period of time to another in:

Accepted Answer

A)  Value 
B)  Price 
C)  Quantity 
D)  Volume 
E)  All of the choices are correct 
A)  Value 
B)  Price 
C)  Quantity 
D)  Volume 
E)  All of the choices are correct

Question 17

The number of items produced and the price per item for the Duffy Manufacturing Company are:   What is the value index of production for 2000 using 1990 as the base period?

Accepted Answer

A)  115.2 
B)  72.9 
C)  110.6 
D)  127.1 
E)  114.9 
A)  115.2 
B)  72.9 
C)  110.6 
D)  127.1 
E)  114.9

Question 18

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) 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 19

i. No systematic approach to collecting and reporting data in index form was evident in North America until about 1900.
Ii) The CPI can be used in determining "real" income.
Iii) Purchasing power of the dollar is determined by finding the inverse of the CPI

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 20

If the Consumer Price Index is 172.2 (1982-84 = 100), what is the purchasing power of the dollar?

Accepted Answer

A)  $1.00 
B)  $0.33 
C)  $0.58 
D)  $0.50 
E)  $0.72 
A)  $1.00 
B)  $0.33 
C)  $0.58 
D)  $0.50 
E)  $0.72

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

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. What is the unweighted aggregate price index?

How is the purchasing power of the dollar computed?

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 Japan produce than the United States?

What component(s) does the CPI include?

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 Fisher's ideal index for 2008.

The CPI for "personal computers and peripheral equipment" in July of 2001 was 29.3 (1982-1984 = 100). Interpret this index.

i. An index is a convenient way of comparing changes for different variables, i.e., average income and food prices. Ii) The concept of real income is sometimes called deflated income. Iii) Purchasing power of the dollar is determined by finding the inverse of the CPI

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

An index number is a percent that can measure the change from one period of time to another in:

The number of items produced and the price per item for the Duffy Manufacturing Company are: What is the value index of production for 2000 using 1990 as the base period?

i. No systematic approach to collecting and reporting data in index form was evident in North America until about 1900. Ii) The CPI can be used in determining "real" income. Iii) Purchasing power of the dollar is determined by finding the inverse of the CPI

If the Consumer Price Index is 172.2 (1982-84 = 100), what is the purchasing power of the dollar?

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

Filters

Exam 15: Index Numbers

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

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. What is the unweighted aggregate price index?

How is the purchasing power of the dollar computed?

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 Japan produce than the United States?

What component(s) does the CPI include?

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 Fisher's ideal index for 2008.

The CPI for "personal computers and peripheral equipment" in July of 2001 was 29.3 (1982-1984 = 100). Interpret this index.

i. An index is a convenient way of comparing changes for different variables, i.e., average income and food prices. Ii) The concept of real income is sometimes called deflated income. Iii) Purchasing power of the dollar is determined by finding the inverse of the CPI

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

An index number is a percent that can measure the change from one period of time to another in:

The number of items produced and the price per item for the Duffy Manufacturing Company are: What is the value index of production for 2000 using 1990 as the base period?

i. No systematic approach to collecting and reporting data in index form was evident in North America until about 1900. Ii) The CPI can be used in determining "real" income. Iii) Purchasing power of the dollar is determined by finding the inverse of the CPI

If the Consumer Price Index is 172.2 (1982-84 = 100), what is the purchasing power of the dollar?

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

Filters