The Consumer Price Index and Government Statistics Chapter 16 The Consumer Price Index and Government Statistics

CPI and Government Statistics 1 _________ measures the value of a variable relative to its value at a base period. A base Index An index number A market basket A fixed market basket

CPI and Government Statistics 1 (answer) _________ measures the value of a variable relative to its value at a base period. A base Index An index number (correct) A market basket A fixed market basket

CPI and Government Statistics 2 An index number of 300 means There is a 30% decrease There is a 30% increase There is a 300% decrease There is a 300% increase.

CPI and Government Statistics 2 (answer) An index number of 300 means There is a 30% decrease There is a 30% increase There is a 300% decrease There is a 300% increase (correct)

CPI and Government Statistics 3 “2000 = 100” means The index number is 2000 The index number is 100 2000 is the base period There is a 2000 percent increase

CPI and Government Statistics 3 (answer) “2000 = 100” means The index number is 2000 The index number is 100 2000 is the base period (correct) There is a 2000 percent increase

CPI and Government Statistics 4 The term “fixed” in “fixed market basket” means there is no change in the Value of the dollar over time Actual purchases over time periods Consumer price index Fixed collection of goods and services over time

CPI and Government Statistics 4 (answer) The term “fixed” in “fixed market basket” means there is no change in the Value of the dollar over time Actual purchases over time periods Consumer price index Fixed collection of goods and services over time (correct)

CPI and Government Statistics 5 The median MLB salary in 1984 was $229,750 and in 2011 was $1.1M. Assuming the CPI is 103.9 for 1984 and 224.9 for 2011, express the 1984 median baseball salary in 2011 dollars. $106,141 $497,313 $508,181 $2,381,039

CPI and Government Statistics 5 (answer) The median MLB salary in 1984 was $229,750 and in 2011 was $1.1M. Assuming the CPI is 103.9 for 1984 and 224.9 for 2011, express the 1984 median baseball salary in 2011 dollars. $106,141 $497,313 (correct) $508,181 $2,381,039

CPI and Government Statistics 6 The consumer price index (CPI) is A price index for all goods consumers buy A price index computed separately for different goods consumers buy

CPI and Government Statistics 6 (answer) The consumer price index (CPI) is A price index for all goods consumers buy (correct) A price index computed separately for different goods consumers buy

CPI and Government Statistics 7 The consumer price index (CPI) applies to All U.S. citizens All consumers All urban consumers

CPI and Government Statistics 7 (answer) The consumer price index (CPI) applies to All U.S. citizens All consumers All urban consumers (correct)

CPI and Government Statistics 8 True or False: The market basket upon which the CPI is based is never adjusted for changes in spending habits. True False

CPI and Government Statistics 8 (answer) True or False: The market basket upon which the CPI is based is never adjusted for changes in spending habits. True False (correct)

CPI and Government Statistics 9 True or False: Both businesses and individuals should be able to rely on government statistics for decision making. True False

CPI and Government Statistics 9 (answer) True or False: Both businesses and individuals should be able to rely on government statistics for decision making. True (correct) False

CPI and Government Statistics 10 The General Social Survey is A government survey A government census A government-funded survey A government-funded census

CPI and Government Statistics 10 (answer) The General Social Survey is A government survey A government census A government-funded survey (correct) A government-funded census

CPI and Government Statistics 11 The reason the government funds university studies on social behavior is College students will be more honest about social behavior College students will be dishonest with the government People do not want to discuss social behavior with the government The university studies have experts in the field, carrying out the survey

CPI and Government Statistics 11 (answer) The reason the government funds university studies on social behavior is College students will be more honest about social behavior College students will be dishonest with the government People do not want to discuss social behavior with the government (correct) The university studies have experts in the field carrying out the survey

CPI and Government Statistics 12 True or False: The U.S. government has one central statistical reporting agency. TRUE FALSE

CPI and Government Statistics 12 (answer) True or False: The U.S. government has one central statistical reporting agency. TRUE FALSE (correct)