Question 1

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 2

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%. 
D)  If the average price of a computer in 1982-1984 was $879.00, the CPI for "personal computers and 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%. 
D)  If the average price of a computer in 1982-1984 was $879.00, the CPI for "personal computers and 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 3

The Statistics Canada reported that the farm population dropped from 30.5 million in 1940 to 16.5
Million in 1999. What is the index for 1999 based on 1940?

Accepted Answer

A)  45.9 
B)  103.0 
C)  54.1 
D)  78.7 
E)  184.8 
A)  45.9 
B)  103.0 
C)  54.1 
D)  78.7 
E)  184.8

Question 4

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 the same as 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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 5

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000
Was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the
Increase in real income from 2000 to 2009?

Accepted Answer

A)  $193 
B)  $139 
C)  $580 
D)  $173 
A)  $193 
B)  $139 
C)  $580 
D)  $173

Question 6

i. The largest component of the Canadian CPI is Food.
ii. 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.
iii. The concept of real income is sometimes called deﬂated income or income expressed in
Constant dollars and the CPI is called the deﬂator.

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 7

i. The CPI serves only one major function: as an economic indicator of the rate of inﬂation.
ii. 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.
iii. The Consumer Price Index measures the change in prices of a ﬁxed market basket of goods and
Services from one period to another.

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 8

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 9

The following data was collected on mutual fund prices.   Compute a simple aggregate index comparing mutual fund prices in 2015 to mutual fund prices in
2010.

Accepted Answer

A)  245.86 
B)  154.51 
C)  153.04 
D)  147.22 
A)  245.86 
B)  154.51 
C)  153.04 
D)  147.22

Question 10

The following data was collected comparing car prices and quantity sold (thousands).   Compute the simple aggregate index to compare car prices in 2010 to 2000.

Accepted Answer

A)  155.93 
B)  122.19 
C)  126.67 
D)  147.22 
A)  155.93 
B)  122.19 
C)  126.67 
D)  147.22

Question 11

i. An index of 239.2 and an index of 86.4 are actually percents.
ii. All indexes have the same base, namely 1982-84, written 1982 - 84 = 100.
iii. The base period for one index might be 1982-84, while the base period for another index might
Be 1977.

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 12

An index of clothing prices for 2014 based on 2000 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 2000 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 13

i. An index of 239.2 and an index of 86.4 are actually percents.
ii. The base period for one index might be 1982-84, while the base period for another index might
Be 1977.
iii. Most business and economic indexes are carried either to the nearest whole percent, such as
312 or 96, or to the nearest 10th of a percent, such as 97.5 and 178.6.

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 14

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

Accepted Answer

A)  Total value of purchases rose 10.3% 
B)  Total value of purchases rose 18.5% 
C)  Total value of purchases fell 1.6% 
D)  Total value of purchases rose 8% 
E)  Total value of purchases rose 15.6% 
A)  Total value of purchases rose 10.3% 
B)  Total value of purchases rose 18.5% 
C)  Total value of purchases fell 1.6% 
D)  Total value of purchases rose 8% 
E)  Total value of purchases rose 15.6%

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. The base number for most indexes is 1.
iii. Converting data to indexes makes it easier to compare the trend in a series composed of
Exceptionally large numbers.

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 16

An index of clothing prices for 2014 based on 2000 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 2000 as the base period and 100 as the base value.  
Determine the Fisher's ideal index for 2014.

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 17

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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 18

i. Etienne Laspeyres developed a method in the latter part of the 19th 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)  (i), (ii), and (iii) are all false statements. 
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)  (i), (ii), and (iii) are all false statements.

Question 19

The average weekly earnings (including overtime) in Canada since 2003 are given below.   Using 2003 as the base year, determine the index for 2004.

Accepted Answer

A)  101.3 
B)  1.3 
C)  201.3 
D)  103.5 
E)  106.8 
A)  101.3 
B)  1.3 
C)  201.3 
D)  103.5 
E)  106.8

Question 20

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

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?

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

The Statistics Canada reported that the farm population dropped from 30.5 million in 1940 to 16.5 Million in 1999. What is the index for 1999 based on 1940?

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 the same as the CPI.

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 Was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the Increase in real income from 2000 to 2009?

The following data was collected on mutual fund prices. Compute a simple aggregate index comparing mutual fund prices in 2015 to mutual fund prices in 2010.

The following data was collected comparing car prices and quantity sold (thousands). Compute the simple aggregate index to compare car prices in 2010 to 2000.

i. An index of 239.2 and an index of 86.4 are actually percents. ii. All indexes have the same base, namely 1982-84, written 1982 - 84 = 100. iii. The base period for one index might be 1982-84, while the base period for another index might Be 1977.

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

An index of clothing prices for 2014 based on 2000 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 2000 as the base period and 100 as the base value. Determine the Fisher's ideal index for 2014.

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.

The average weekly earnings (including overtime) in Canada since 2003 are given below. Using 2003 as the base year, determine the index for 2004.

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

What Is Statistics

Describing Data: Frequencydistributions and Graphic Presentation

Describing Data: Numerical Measures

Describing Data: Displaying and Exploring Pata

A Sulvey of Probability Concepts

Discrete Probability Distributions

Continuous Probabilitydistributions

Sampling Methods and the Central Umit Theorem

Estimation and Confidence Intervals

One-Sample Tests of Hypothesis

Two Sample Tests of Hypothesis

Analysis of Variance

Linear Regression and Correlation

Multiple Regression and Correlation Analysis

Decision Making and Payoff Tables in Investment Scenarios

Filters

Exam 15: Chi-Square Applications