CPI Quiz Answers

Started on Wednesday, 3 June 2020, 12:53 PM State Finished Completed on Wednesday, 3 June 2020, 1:02 PM Time taken 8 mins 18 secs Mark 10.00 out of 10.00 (100%) Question 1 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following best describes the consumer price index (CPI)? Select one: a. It is a unit free measure b. The CPI is an economic indicator. c. The CPI measures changes in the total price of a basket of goods and services. d. All of these choices are correct. Feedback Your answer is correct. The CPI is an economic indicator. B The CPI measures changes in the total price of a basket of goods and services. C It is a unit free measure D All of these choices are correct. The correct answer is: All of these choices are correct. Question 2 Correct Mark 1.00 out of 1.00 Flag question Question text In 2002 your annual salary was $50 000 and in 2007 your annual salary is $75 000. The CPI in 2002 was 136 and the CPI in 2007 was 156.1. Which of the following is the percentage change in your real income from 2002 to 2007? Select one: a. 30.69% increase in real income from 2002 to 2007. b. 33.33% increase in real income from 2002 to 2007. c. 50% increase in real income from 2002 to 2007. d. None of these choices are correct. Feedback Your answer is correct. The correct answer is: 30.69% increase in real income from 2002 to 2007. Question 3 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following statements is correct? Select one: a. The Paasche price index is a weighted price index. b. The Laspeyres price index is an unweighted price index. c. The price relative is a weighted price index. d. The Fischer price index is an unweighted price index. Feedback Your answer is correct. A B C D The correct answer is: The Paasche price index is a weighted price index. Question 4 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following statements is correct? Select one: a. The Laspeyres price index tends to overestimate price increases during periods of inflation. b. The Laspeyres price index tends to underestimates price increases during periods of inflation. c. The Paasche price index is always equal to the Laspeyres price index during periods of inflation. d. The Paasche price index tends to overestimates price increases during periods of inflation. Feedback Your answer is correct. The correct answer is: The Laspeyres price index tends to overestimate price increases during periods of inflation. Question 5 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following statements is correct? Select one: a. The Laspeyres price index uses base period prices as weights. b. The Paasche price index uses current period quantities as weights. c. The Laspeyres price index uses current period quantities as weights. d. The Paasche price index uses base period quantities as weight. Feedback Your answer is correct. The correct answer is: The Paasche price index uses current period quantities as weights. Question 6 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following is the value of annual real income for an annual salary of $85,000 when the CPI is 125? Select one: a. $68 000 per annum b. $680 per annum c. $106 250 per annum d. None of these choices are correct. Feedback Your answer is correct. The correct answer is: $68 000 per annum Question 7 Correct Mark 1.00 out of 1.00 Flag question Question text If the Laspeyres price index for a basket of goods is 128 and the Paasche price index for the same basket of goods for the same time period is 119, which of the following is the value of the Fischer price index, the geometric mean of these two indices? Select one: a. None of these choices are correct. b. 123.5 c. 123.42 d. 9 Feedback Your answer is correct. The correct answer is: 123.42 Question 8 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following is the correct interpretation of a Paasche price index of 75, where the base year is 2009 and the current year is 2011? Select one: a. According to the Paasche price index, prices have decreased by 75% from 2009 to 2011. b. According to the Paasche price index, prices have decreased by 25% from 2009 to 2011. c. According to the Paasche price index, prices have decreased by 25% from 2011 to 2009. d. None of these choices are correct. Feedback Your answer is correct. The correct answer is: According to the Paasche price index, prices have decreased by 25% from 2009 to 2011. Question 9 Correct Mark 1.00 out of 1.00 Flag question Question text Which of the following is the correct interpretation of a Laspeyres price index of 135, where the base year is 2007 and the current year is 2010? Select one: a. None of these choices are correct. b. According to the Laspeyres price index, prices have risen by 35% from 2010 to 2007. c. According to the Laspeyres price index, prices have risen by 135% from 2007 to 2010. d. According to the Laspeyres price index, prices have risen by 35% from 2007 to 2010. Feedback Your answer is correct. The correct answer is: According to the Laspeyres price index, prices have risen by 35% from 2007 to 2010. Question 10 Correct Mark 1.00 out of 1.00 Flag question Question text What is the value of Real GDP in 2008 if Nominal GDP was 1 131 586 ($million) and CPI was 161.4? Select one: a. 701 million dollars b. None of these choices are correct. c. 7 011 million dollars d. 701 107 million dollars Feedback Your answer is correct. The correct answer is: 701 107 million dollars