Question 1

What term is used for index numbers used to compare changes in prices using a single price point as a starting point?&#10;A) Chain base relative&#10;B) Constant bas relative&#10;C) Floating base relative&#10;D) Fixed base relative

Accepted Answer

Fixed base relative is the term used for index numbers that compare changes in prices using a single price point as a starting point. This method keeps the base period fixed, allowing for consistent comparisons over time.

Question 2

The value of a large property in Spain has increased from €765,000 to €820,000 during the last year. At the same time, property prices in the region have increased 8.5% on average. Which of the following statements is TRUE?

A) The relative value of the property has decreased
B) The relative value of the property has increased
C) The relative value of the property has stayed the same
D) You cannot calculate the relative value of the property

Accepted Answer

The property's value increased from €765,000 to €820,000, which is an increase of €55,000. To find the percentage increase: (€55,000 / €765,000) * 100 = approximately 7.19%. Since the average increase in the region is 8.5%, the property's increase is less than the average, indicating its relative value has decreased.

Question 3

The price of Indian steel has been reported using an index price with a base set in 1995. In 2008 the index was 235 and in 2012 it was 289. Recalculate the index price for 2012, using 2008 as a new base (0 decimal place).

A) 117
B) 119
C) 121
D) 123

123

Accepted Answer

123

Question 4

The average salary (indicator) has increased by from $26,568 to $28,786 in the last 3 years. During the same time the value of silver has fallen by 53% (0.53). Calculate the Real Value Index of silver (0 decimal places).

A) 46
B) 47
C) 48
D) 49

Accepted Answer

The answer of The average salary (indicator) has increased by...

Question 5

The average salary (indicator) in Yeman was measured as YER (Yemeni Rial) 507,000 in 2011 and YER523,000 in 2013. At the same time, the cost of a small car has increased from YER3.65 million to YER3.92 million. Using the time series deflation method, calculate the Real Value Index of the small car (0 decimal places)

A) 100
B) 104
C) 108
D) 112

Accepted Answer

The Real Value Index is calculated by dividing the nominal value in the current year by the nominal value in the base year and multiplying by 100. In this case, the nominal value of the small car in 2011 is YER3.65 million and the nominal value in 2013 is YER3.92 million. The average salary in 2011 is YER507,000 and the average salary in 2013 is YER523,000. Therefore, the Real Value Index of the small car is (3.92/3.65) * (507/523) * 100 = 104.

Question 6

The price of diesel was Bt28.80 (Thai Baht) in January and Bt31.18 in August. Express this change as a price index (assuming January price = 100; 0 decimal places).&#10;A) 106&#10;B) 107&#10;C) 108&#10;D) 109

Accepted Answer

The answer of The price of diesel was Bt28.80 (Thai...

Question 7

Which of the following statements is TRUE if you wish to compare two sets of fixed base relatives with different bases?&#10;A) The bases of both sets should be altered to equal 100 for the most recent time period&#10;B) The base of one set should be altered so that figures use the same time period as a base&#10;C) The time series trend of both data sets should be used to make a comparison&#10;D) Such a comparison is not possible, new data should be collected using a common base

Accepted Answer

To compare two sets of fixed base relatives with different bases, the base of one set should be altered so that both sets use the same time period as a base. This allows for a meaningful comparison between the two sets.

Question 8

Calculate the price of a loaf of bread at p₈when p₀=$1.26 and I_8/0=104 (0 decimal places). A) $1.25 B) $1.28 C) $1.31 D) $1.34

Accepted Answer

The price index I_8/0 of 104 indicates a 4% increase from the base price. Therefore, p₈ = p₀ * (I_8/0 / 100) = $1.26 * 1.04 = $1.3104, which rounds to $1.31.

Question 9

Calculate the price index when p₀=$45.78 and p₁₂=$43.92 (0 decimal places). A) 96 B) 100 C) 104 D) 108

Accepted Answer

The price index is calculated as the ratio of the new price to the base price, multiplied by 100. Here, the new price is $43.92 and the base price is $45.78. So, the price index = ($43.92 / $45.78) * 100 = 95.93, which rounds to 96 (0 decimal places).

Question 10

Which of the following options is the BEST definition of index numbers?&#10;A) Numbers used to help find data in a list&#10;B) Numbers used to express a percentage change in a variable over time&#10;C) Numbers used to express variation in values within a dataset&#10;D) Numbers used to link pieces of data to descriptions of their meaning

Accepted Answer

Index numbers are primarily used to express the percentage change in a variable over time, such as price levels, economic indicators, or other quantitative data, allowing for easier comparison across different time periods.

Deck 18: Index Relatives