Question 1

A ______ is a value that may change within the scope of a given problem or set of operations
A)constant
B)variable
C)function
D)exponent

Accepted Answer

A variable is a symbol or name that stands for a value that may change within the scope of a given problem or set of operations. Constants have fixed values, functions are sets of instructions that perform a task, and exponents are powers to which a number is raised.

Question 2

__________ variable is a factor that is not itself under study but affects the measurement of the study variables or the examination of their relationships.
A)exogenous
B)endogenous
C)extraneous
D)dependent

Accepted Answer

An extraneous variable is one that is not the primary focus of a study but may influence the outcome or the relationship between the study variables. These variables are external factors that can affect the results, making it harder to establish a clear cause-and-effect relationship between the variables being studied.

Question 3

An index number is used:
A)to measure changes in quantity
B)to measure changes in demand
C)to measure changes in a variable over time
D)to measure changes in price

Accepted Answer

An index number is primarily used to measure changes in a variable over time, such as price levels, quantities, or other economic indicators.

Question 4

The ratio of a new price to the base year price is called the:
A)price absolute
B)price decrease
C)price increase
D)price relative

Accepted Answer

The ratio of a new price to the base year price is known as the price relative. This term is used in economics and statistics to measure how the price of a specific item changes over time relative to a base year.

Question 5

A simple aggregate quantity index is used to:
A)measure the change in price of a product
B)measure the change in quantity of a product
C)measure the overall change in quantity of a range of products
D)measure the overall change in price of a range of products

Accepted Answer

The answer of A simple aggregate quantity index is used...

Question 6

A simple aggregate price index:
A)ignores relative quantities
B)compares relative quantities to relative prices
C)considers relative quantities
D)compares absolute prices to absolute quantities

Accepted Answer

A simple aggregate price index ignores relative quantities, focusing instead on the comparison of price levels of a basket of goods at different times without weighting the items by their quantities.

Question 7

This index measures the change from month to month in the cost of a representative 'basket' of goods and services of the type bought by a typical household
A)paasche price index
B)retail price index
C)laspeyres price index
D)financial times index

Accepted Answer

The Retail Price Index (RPI) measures the change from month to month in the cost of a representative 'basket' of goods and services of the type bought by a typical household. It is a measure of inflation that includes housing costs.

Question 8

The Laspeyres and Paasche index are examples of:
A)weighted price index only
B)aggregate index numbers
C)weighted index numbers
D)weighted quantity index only

Accepted Answer

The Laspeyres and Paasche indexes are examples of weighted index numbers, where weights are used to account for the importance of different items in the calculation.

Question 9

The Laspeyres price index:
A)regards the current year quantities as fixed
B)regards the base year quantities as fixed
C)regards the base year prices as fixed
D)regards the current quality as fixed

Accepted Answer

The Laspeyres price index uses the quantities of the base year as fixed to compare the total cost of a specific basket of goods over time, allowing for the measurement of price changes without the influence of changes in quantity.

Question 10

A scaling factor is used to:
A)change a simple index to a weighted index
B)convert the paasche index to a laspeyres index
C)change an aggregate index to a weighted index
D)change the base year

Accepted Answer

A scaling factor is used to change the base year of an index, allowing for comparison across different time periods by adjusting the index values to a new base year.

Question 11

The distinctive feature of the ______ index is that it uses a group of commodities purchased in the base period as the basis for comparison
A)paasche's
B)laspeyres
C)fisher's
D)dorbish-bowley

Accepted Answer

The Laspeyres index uses a fixed basket of goods and services, determined in the base period, to compare prices over time, making it distinctive for using the same group of commodities purchased in the base period as the basis for comparison.

Question 12

________was developed to measure changes in the cost of living in order to determine the wage increases necessary to maintain a constant standard of living.
A)price index
B)sensex
C)correlation
D)regression

Accepted Answer

A price index measures changes in the price level of a market basket of consumer goods and services purchased by households, which is used to determine the necessary wage increases to maintain a constant standard of living.

Question 13

____________ measure of living costs based on changes in retail prices
A)correlation
B)whole sale price index
C)consumer price index
D)regression

Accepted Answer

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living.

Question 14

Paasche index was developed by ______economist Hermann Paasche for measuring current price or quantity levels relative to those of a selected base period
A)american
B)british
C)australian
D)german

Accepted Answer

The Paasche index was developed by German economist Hermann Paasche.

Question 15

The ratio-moving-average procedure can be used to deseasonalize data
A) true
B) false
C) either of the above
D) any of the above

Accepted Answer

The ratio-moving-average procedure is indeed a method used to deseasonalize data, which helps in analyzing the underlying trends by removing the seasonal effects.

Question 16

The weighing factor, used in the exponential smoothing method, is always a number between ______
A)zero and ten
B)five and ten
C)zero and one
D)zero and negative one

Accepted Answer

The weighing factor in the exponential smoothing method, also known as the smoothing constant, is always a number between zero and one. This factor determines the weight of the most recent observation in the smoothing process.

Question 17

A moving average of a time series is the value around which a series moves over time.
A) true
B) false
C) either of the above
D) any of the above

Accepted Answer

A moving average smooths out short-term fluctuations and highlights longer-term trends or cycles, rather than being a value around which a series moves.

Question 18

In a time series analysis it is often important to analyze seasonal variations
A) true
B) false
C) either of the above
D) any of the above

Accepted Answer

Seasonal variations are a critical component of time series analysis, as they help in understanding patterns that recur over specific periods within the data, such as monthly, quarterly, or annually. This analysis is essential for forecasting and planning purposes.

Question 19

The index number for the price of a good in 2002 was 142 and in 2003, it was 148.5, on a base year of 1994. What is the percent increase in price of gasoline from 2002 to 2003
A)4.377%
B)4.577%
C)95.62%
D)6.5%

Accepted Answer

The answer of The index number for the price of...

Question 20

Which one of the following is not a component of the multiplicative time series model?
A)trend
B)irregular variation
C)regression trend
D)seasonality

Accepted Answer

The multiplicative time series model is composed of trend, seasonality, and irregular variation components. The regression trend is not considered a component of this model; instead, "trend" generally refers to the long-term movement in the series, not specifically to a regression trend.

Quiz 5: Time Series Analysis and Index Numbers: Part A

A ______ is a value that may change within the scope of a given problem or set of operations

__________ variable is a factor that is not itself under study but affects the measurement of the study variables or the examination of their relationships.

An index number is used:

The ratio of a new price to the base year price is called the:

A simple aggregate quantity index is used to:

A simple aggregate price index:

This index measures the change from month to month in the cost of a representative 'basket' of goods and services of the type bought by a typical household

The Laspeyres and Paasche index are examples of:

The Laspeyres price index:

A scaling factor is used to:

The distinctive feature of the ______ index is that it uses a group of commodities purchased in the base period as the basis for comparison

________was developed to measure changes in the cost of living in order to determine the wage increases necessary to maintain a constant standard of living.

____________ measure of living costs based on changes in retail prices

Paasche index was developed by ______economist Hermann Paasche for measuring current price or quantity levels relative to those of a selected base period

The ratio-moving-average procedure can be used to deseasonalize data

The weighing factor, used in the exponential smoothing method, is always a number between ______

A moving average of a time series is the value around which a series moves over time.

In a time series analysis it is often important to analyze seasonal variations

The index number for the price of a good in 2002 was 142 and in 2003, it was 148.5, on a base year of 1994. What is the percent increase in price of gasoline from 2002 to 2003

Which one of the following is not a component of the multiplicative time series model?