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

2. 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

3. 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

4. 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.

5. 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)

6. 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

7. 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

8. 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

9. 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)

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

11. 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 for 1984 and for 2011, express the 1984 median baseball salary in 2011 dollars.
$106,141
$497,313 (correct)
$508,181
$2,381,039

12. 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

13. 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

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

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

16. 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

17. 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)

18. 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

19. 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

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

21. 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

22. 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

23. 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

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

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