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 1981 (the base year) and for 2000?
A) 100 for 1981, 139 for 2000
B) 139 for 1981, 100 for 2000
C) 100 for 1981, 61 for 2000
D) 100 for 1981, 100 for 2000
E) 100 for 1981, 160 for 2000

Question

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 1981 (the base year) and for 2000?
A) 100 for 1981, 139 for 2000 
B) 139 for 1981, 100 for 2000 
C) 100 for 1981, 61 for 2000 
D) 100 for 1981, 100 for 2000 
E) 100 for 1981, 160 for 2000

Quizplus · Accepted Answer

The Answer of 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 1981 (the base year) and for 2000?
A) 100 for 1981, 139 for 2000 
B) 139 for 1981, 100 for 2000 
C) 100 for 1981, 61 for 2000 
D) 100 for 1981, 100 for 2000 
E) 100 for 1981, 160 for 2000

As Chief Statistician for the Municipality, You Want to Compute