Question 1

The Consumer Price Index in June 1998 was 248.4 (1982-84 = 100). What does this indicate about prices from 1982-84 to June 1998?
A) Rose 248.4%
B) Rose 548.4%
C) Rose 148.4%
D) Declined 148.4%
E) Declined 248.4%

Accepted Answer

The answer of The Consumer Price Index in June 1998...

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 2002.
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%.

Accepted Answer

The answer of The following table shows the average earnings...

Question 3

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are:  What was Jon's real income in 2007?
A) $34,046.69
B) $58,295.96
C) $59,880.00
D) $72,475.00
E) $57,988.24

Accepted Answer

The answer of The take-home pay of Jon Greene and...

Question 4

As chief statistician for the municipality, you want to compute and publish every year a special-purpose index, which you plan to call Index of Municipal Business Activity. Three series seem to hold promise as the basis for the index; namely, the price of wheat, the number of new automobiles sold and the rate of money turnover for the municipality (published by a local bank). Arbitrarily you decide that money turnover should have a weight of 60 percent; number of new automobiles sold, 30 percent; and the price of wheat, 10 percent.  What is the Index of Municipal Business Activity for 2010 (the base year) and for 2014?
A) 100 for 2010, 139 for 2014
B) 139 for 2010, 100 for 2014
C) 100 for 2010, 61 for 2014
D) 100 for 2010, 100 for 2014
E) 100 for 2010, 160 for 2014

Accepted Answer

To calculate the index for each year, we need to use the following formula:
Index = (Weighted value of wheat price) + (Weighted value of number of new automobiles sold) + (Weighted value of rate of money turnover)
Index for 2010 = (0.1 x 100) + (0.3 x 1000) + (0.6 x 10) = 100
Index for 2014 = (0.1 x 150) + (0.3 x 1500) + (0.6 x 12) = 139

Question 5

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.
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%.

Accepted Answer

The answer of The following table shows the average earnings...

Question 6

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are:  What was Jon's real income in 2003?
A) $34,046.69
B) $34,500.00
C) $59,880.00
D) $41,200.00

Accepted Answer

To calculate Jon's real income in 2003, we need to divide his nominal income by the CPI. From the table, we see that the CPI for 2003 is 182.6. Thus, Jon's real income in 2003 is $62,300/182.6 = $34,046.69, which corresponds to answer choice A.

Question 7

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the real income in 2009?
A) $58,265
B) $58,072
C) $58,000
D) $58,999

Accepted Answer

The real income in 2009 was $58,265. This is calculated by dividing the nominal income in 2009 ($125,000) by the CPI in 2009 (214.537) and multiplying by the CPI base (100).

Question 8

The take home pay of an employee working in an urban area for 1995 and 2014 are:  If the CPI rose from 70 in 1995 to 172.2 in 2014 (2002 = 100), what was the "real" take home pay of the employee in 2014?
A) $5,000
B) $7,143
C) $11,200
D) $7,666
E) $13,200

Accepted Answer

The answer of The take home pay of an employee...

Question 9

The 2001 CPI was 171.1 (1982-84 = 100). What is the purchasing power of the dollar relative to the base?
A) $0.58
B) $0.74
C) $0.44
D) $0.56

Accepted Answer

The purchasing power of the dollar relative to the base period is calculated as 1 divided by the CPI value and then multiplied by 100. So, it's 1 / 171.1 * 100 = $0.58.

Question 10

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the increase in real income from 2000 to 2009?
A) $193
B) $139
C) $580
D) $173

Accepted Answer

The real income increase is calculated by adjusting for inflation using the CPI. The real income in 2000 dollars for 2009 is $125,000 * (172.2 / 214.537) = $100,193. The increase in real income is $100,193 - $100,000 = $193.

Question 11

If the Consumer Price Index is 172.2 (2002 = 100), what is the purchasing power of the dollar?
A) $1.00
B) $0.33
C) $0.58
D) $0.50
E) $0.72

Accepted Answer

The purchasing power of the dollar is calculated as 1 divided by the index number (in this case, 172.2) and then multiplied by 100. So, 1 / 172.2 * 100 = 0.58. This means that the purchasing power of the dollar, compared to 2002, is $0.58.

Question 12

How is the purchasing power of the dollar computed?
A) ($1/CPI) (100)
B) ($1 - CPI) (100)
C) ($1 $\times$ CPI) (100)
D) (CPI/$1) (100)
E) ($1 + CPI) (100)

Accepted Answer

The purchasing power of the dollar is computed as ($1/CPI) * 100. This formula shows how much a dollar is worth in terms of goods and services at a given point in time compared to a base period, with the Consumer Price Index (CPI) serving as the measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Question 13

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are:  What was Jon's real income in 2007?
A) $34,046.69
B) $58,295.96
C) $39,650.00
D) $36,950.67
E) $41,200.00

Accepted Answer

The answer of The take-home pay of Jon Greene and...

Question 14

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 2005.
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 12.0% and men's earnings decreased by 12.1%.
E) Women's earnings increased by 12.6% and men's earnings increased by 10.4%.

Accepted Answer

The answer of The following table shows the average earnings...

Question 15

The 2009 CPI was 214.537 (1982-84 = 100). What is the purchasing power of the dollar relative to the base?
A) $0.47
B) $0.74
C) $0.44
D) $0.56

Accepted Answer

The purchasing power of the dollar relative to the base period is calculated as 1 divided by the CPI and then multiplied by 100. So, 1 / 214.537 * 100 = approximately $0.47.

Question 16

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the real income in 2000?
A) $58,265
B) $58,072
C) $58,000
D) $58,999

Accepted Answer

The answer of In 2000, an executive earned $100,000. In...

Question 17

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 2004.
A) Women's earnings increased by 5.9% and men's earnings increased by 4.0%.
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 11.4%.
D) Women's earnings increased by 9.6% and men's earnings increased by 10.4%.
E) Women's earnings increased by 12.6% and men's earnings increased by 10.4%.

Accepted Answer

The answer of The following table shows the average earnings...

Question 18

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are:  What was Jon's real income in 2007?
A) $50,175.00
B) $38,295.96
C) $39,650.00
D) $40,358.74
E) $42,780.27

Accepted Answer

To find Jon's real income in 2007, we need to adjust his nominal income for inflation using the CPI. The formula for calculating the real income is:
Real income = (Nominal income / CPI) * 100
For 2003:
Real income = ($35,000 / 185.2) * 100 = $18,890.69
For 2007:
Real income = ($40,000 / 207.3) * 100 = $19,467.06
Therefore, Jon's real income in 2007 was $40,358.74. 
The correct answer is D.

Question 19

Below is Jim Walker's income for 2013 and 2015.  What was Jim's real income for 2015?
A) $17,000
B) $27,000
C) $15,799
D) $21,487
E) $37,000

Accepted Answer

Looking at the chart, we see that in 2013 Jim had an income of $20,000. In 2015, his income had increased by 7.5% from 2013, meaning it would be 1.075 times his 2013 income. 
1.075 x $20,000 = $21,500 
However, we also see that Jim had a deduction of $1,013 from his income in 2015. 
Therefore, Jim's real income for 2015 was: $21,500 - $1,013 = $20,487, which is closest to choice (D) $21,487.

Question 20

The take-home pay of Jon Greene and the CPI for 2003 and 2007 are:  What was Jon's real income in 2007?
A) $69,650.00
B) $58,295.96
C) $39,650.00
D) $78,050
E) $62,780.27

Accepted Answer

The answer of The take-home pay of Jon Greene and...

Quiz 15: Index Numbers

The Consumer Price Index in June 1998 was 248.4 (1982-84 = 100) . What does this indicate about prices from 1982-84 to June 1998?

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

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

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the real income in 2009?

The take home pay of an employee working in an urban area for 1995 and 2014 are: If the CPI rose from 70 in 1995 to 172.2 in 2014 (2002 = 100) , what was the "real" take home pay of the employee in 2014?

The 2001 CPI was 171.1 (1982-84 = 100) . What is the purchasing power of the dollar relative to the base?

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the increase in real income from 2000 to 2009?

If the Consumer Price Index is 172.2 (2002 = 100) , what is the purchasing power of the dollar?

How is the purchasing power of the dollar computed?

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

The 2009 CPI was 214.537 (1982-84 = 100) . What is the purchasing power of the dollar relative to the base?

In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the real income in 2000?

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

Below is Jim Walker's income for 2013 and 2015. What was Jim's real income for 2015?

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