CHECK THE BASICS

For Exercise 16.1, see page 373. For Exercise 16.2, see page 374.

Question 16.3

16.3 Index numbers. The value of a variable relative to its value at a base period is measured by

  1. (a) an index number.

  2. (b) a fixed market basket of goods.

  3. (c) the ratio of the average value and the standard deviation.

  4. (d) the ratio of the median and the interquartile range.

Question 16.4

16.4 Index numbers. To find the index number for a value of a variable relative to its value at a base period, we use the formula

  1. (a) index number =

  2. (b) index number =

  3. (c) index number =

  4. (d) index number =

Question 16.5

16.5 Fixed market baskets. An index number that describes the total cost of a collection of goods and services

  1. (a) is called an inflation factor.

  2. (b) is called a fixed market basket price index.

  3. (c) must be larger than 100.

  4. (d) All of the above are correct.

Question 16.6

16.6 The Consumer Price Index (CPI). The CPI

  1. (a) can be thought of as a fixed market basket price index for the collection of all the goods and services that consumers buy. However, it is not a true fixed market basket price index because of adjustments for changing buying habits, new products, and improved quality.

  2. 382

    (b) can be used to change dollar amounts at one time into the amount at another time that has the same buying power.

  3. (c) is determined from data from several large sample surveys.

  4. (d) All of the above are correct.

Question 16.7

16.7 Government statistics. Government statistical offices

  1. (a) are always a single, centralized agency.

  2. (b) provide complete social and economic data for a country.

  3. (c) produce data needed for government policy and decisions by businesses and individuals.

  4. (d) All of the above are correct.