Deck 20: Index Numbers

Question 1

True or False: The changes in the price of the least consumed commodities are overly influential in a weighted aggregate price index.

Answer 1

False

Question 2

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 3 using year 1 as the base year?

Answer 2

109.25,111.74 and 115.92

Question 3

True or False: The consumer price index is a Paasche price index.

Answer 3

False

Question 4

True or False: The base period should be recent so that a price index is not severely affected by change in technology,and consumer attitudes and habits.

Question 5

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 2 using year 5 as the base year?

Question 6

True or False: For a price index,it is preferable to select the base period in a period of economic stability.

Question 7

True or False: The Paasche price index has the disadvantage that current consumption quantities are usually hard to obtain.

Question 8

True or False: Unweighted aggregate price indices account for differences in the magnitude of prices per unit and differences in the consumption levels of the items in the market basket.

Question 9

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 4 using year 1 as the base year?

Question 10

True or False: The Laspeyres price index is a form of weighted aggregate price index.

Question 11

True or False: The Paasche price index uses the consumption quantities in the year of interest as the weights.

Question 12

True or False: The Laspeyres price index uses the initial consumption quantities as the weights.

Question 13

True or False: A simple price index tracks the price of a group of commodities at a given period of time to the price paid for that group of commodities at a particular point of time in the past.

Question 14

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 3 using year 5 as the base year?

Question 15

True or False: The more expensive commodities are overly influential in an unweighted aggregate price index.

Question 16

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 1 using year 5 as the base year?

Question 17

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what are the simple price indices for electricity,natural gas and fuel oil,respectively,in year 5 using year 1 as the base year?

Question 18

True or False: The Paasche price index reflects more accurately the consumption cost at a point in time because it uses the consumption quantities in the initial year as the base.

Question 19

True or False: The Laspeyres price index has the disadvantage that the consumption pattern in the initial period might be quite different from that in the current period and,hence,does not reflect accurately the current consumption cost.

Question 20

True or False: The Paasche price index is a form of unweighted aggregate price index.

Question 21

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the unweighted aggregate price index for the basket of four food items in 2010 using 2008 as the base year?

Question 22

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the unweighted aggregate price index for the basket of four food items in 2012 using 2008 as the base year?

Question 23

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the unweighted aggregate price index for the group of three energy items in year 5 using year 1 as the base year?

Question 24

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2010 using 2008 as the base year?

Question 25

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the unweighted aggregate price index for the group of three energy items in year 4 using year 1 as the base year?

Question 26

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the unweighted aggregate price index for the basket of four food items in 2011 using 2008 as the base year?

Question 27

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the Paasche price index for the group of three energy items in year 5 for a family that consumed 13 units of electricity,26 units of natural gas and 235 units of fuel oil in year 5 using year 1 as the base year?

Question 28

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2008 using 2012 as the base year?

Question 29

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the Laspeyres price index for the group of three energy items in year 3 for a family that consumed 15 units of electricity,24 units of natural gas and 200 units of fuel oil in year 1 using year 1 as the base year?

Question 30

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2010 using 2012 as the base year?

Question 31

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the Paasche price index for the basket of four food items in 2011 that consisted of 60 bushels of wheat,40 bushels of corn,35 bushels of soybeans and 70 hundredweight of milk in 2011 using 2008 as the base year?

Question 32

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the Laspeyres price index for the group of three energy items in year 5 for a family that consumed 15 units of electricity,24 units of natural gas and 200 units of fuel oil in year 1 using year 1 as the base year?

Question 33

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2011 using 2008 as the base year?

Question 34

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2012 using 2008 as the base year?

Question 35

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the unweighted aggregate price index for the group of three energy items in year 3 using year 1 as the base year?

Question 36

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the Paasche price index for the group of three energy items in 2004 for a family that consumed 13 units of electricity,26 units of natural gas and 235 units of fuel oil in year 3 using year 1 as the base year?

Question 37

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the Paasche price index for the basket of four food items in 2010 that consisted of 50 bushels of wheat,30 bushels of corn,40 bushels of soybeans and 80 hundredweight of milk in 2010 using 2008 as the base year?

Question 38

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the Paasche price index for the group of three energy items in year 4 for a family that consumed 13 units of electricity,26 units of natural gas and 235 units of fuel oil in year 4 using year 1 as the base year?

Question 39

TABLE 16-15
Given below are the average prices for three types of energy products for five consecutive years.
Referring to Table 16-15,what is the Laspeyres price index for the group of three energy items in year 4 for a family that consumed 15 units of electricity,24 units of natural gas and 200 units of fuel oil in year 1 using year 1 as the base year?

Question 40

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what are the simple price indices for wheat,corn,soybeans and milk,respectively,in 2009 using 2012 as the base year?

Question 41

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the Paasche price index for the basket of four food items in 2012 that consisted of 40 bushels of wheat,50 bushels of corn,35 bushels of soybeans and 60 hundredweight of milk in 2012 using 2008 as the base year?

Question 42

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the Laspeyres price index for the basket of four food items in 2012 that consisted of 50 bushels of wheat,30 bushels of corn,40 bushels of soybeans and 80 hundredweight of milk in 2008 using 2008 as the base year?

Question 43

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the Laspeyres price index for the basket of four food items in 2011 that consisted of 50 bushels of wheat,30 bushels of corn,40 bushels of soybeans and 80 hundredweight of milk in 2008 using 2008 as the base year?

Question 44

TABLE 16-16
Given below are the prices of a basket of four food items from 2008 to 2012.
Referring to Table 16-16,what is the Laspeyres price index for the basket of four food items in 2010 that consisted of 50 bushels of wheat,30 bushels of corn,40 bushels of soybeans and 80 hundredweight of milk in 2008 using 2008 as the base year?