i. Millions of employees in automobile, steel and other industries have their wages adjusted upward when the CPI increases. The specifics are in the management-union contracts. These clauses in the contracts are referred to as "cola clauses."
Ii) When two or more series of index numbers to be compared do not have the same base period, we select a common base period for all series. Then we use the respective base numbers as the denominators and convert each base to the new base.
Iii) The largest component of the Canadian CPI is Food.
A) (i), (ii) and (iii) are all correct statements
B) (i) and (ii) are correct statements, but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) All statements are false

Question

Quizplus · Accepted Answer

The first statement is correct as "cola clauses" refer to cost-of-living adjustments tied to the CPI. The second statement is correct regarding the method of comparing index numbers with different base periods. The third statement is incorrect; the largest component of the Canadian CPI is typically shelter, not food.

I Millions of Employees in Automobile, Steel and Other Industries