Question 1

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.F) C) and D)
G) D) and E)

Question 2

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 2003.

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%.F) C) and D)
G) A) and E)

Question 3

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 Aggregate price index for 2014.

Accepted Answer

A)   111.8
B)   112.9
C)   113.3
D)   112.5
E)   113.0F) C) and D)
G) B) and E)

Question 4

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)   (i) , (ii) , and (iii)  are all false statements.F) C) and D)
G) B) and D)

Question 5

i. If two or more series of index numbers have the same year as the base period, then they can be compared directly. 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. Canada pension plan payments and old age security pensions are periodically adjusted based on the Consumer Price Index.

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.F) All of the above
G) B) and C)

Question 6

An index of clothing prices for 2014 based on 2000 is to be constructed. The prices for 2000 and 2014 and the quantity consumed in 2000 are shown below.  Assuming that the number sold remained constant, i.e., the same number were sold in 2014 as in 2000, what is the weighted index of price for 2014 using 2000 as the base?

Accepted Answer

A)   206.7
B)   214.5
C)   48.4
D)   46.6
E)   240.0F) C) and D)
G) All of the above

Question 7

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. Using the Laspeyres method, what is the price index for these items?

Accepted Answer

A)   110.3
B)   98.4
C)   108.0
D)   118.5
E)   115.6F) A) and B)
G) A) and C)

Question 8

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)   147.22E) A) and B)
F) None of the above

Question 9

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)   114.9F) A) and E)
G) C) and D)

Question 10

i. Canada pension plan payments and old age security pensions are periodically adjusted based on the Consumer Price Index. ii. The largest component of the Canadian CPI is Food.
iii. 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.

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.F) A) and D)
G) B) and D)

Question 11

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)   $41,200.00F) A) and E)
G) B) and E)

Question 12

The following data was collected on mutual fund prices.  Compute the Laspeyres price index to compare mutual fund prices in 2015 to 2010.

Accepted Answer

A)   245.86
B)   154.51
C)   153.04
D)   147.22E) All of the above
F) None of the above

Question 13

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.F) None of the above
G) B) and C)

Exam 15: Index Numbers

Correct Answer
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Correct Answer
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The following data was collected on mutual fund prices. Compute the Laspeyres price index to compare mutual fund prices in 2015 to 2010.

Correct Answer
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Correct Answer
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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.

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

Correct Answer
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Correct Answer
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Correct Answer
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Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. Using the Laspeyres method, what is the price index for these items?

Correct Answer
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Correct Answer
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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.

Correct Answer
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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 Aggregate price index for 2014.

Correct Answer
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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?

Correct Answer
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Exam 15: Index Numbers

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The following data was collected on mutual fund prices. Compute the Laspeyres price index to compare mutual fund prices in 2015 to 2010.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Data for selected vegetables purchased at wholesale prices for 1995 and 2000 are shown below. Using the Laspeyres method, what is the price index for these items?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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 Aggregate price index for 2014.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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