i. To construct a special-purpose index designed to measure general business activity, the weights are based on the judgments of the statistician and assigned to each series. ii. The Consumer Price Index measures the change in prices of a fixed market basket of goods and services from one period to another.
iii. The CPI is not just one index, but includes a large number of groups, subgroups and selected items, such as a food index, a transportation index and a shelter index.
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) (i), (ii), and (iii) are all false statements.

Question

Quizplus · Accepted Answer

All statements are correct. Statement (i) describes the process of constructing a special-purpose index with weights assigned based on expert judgment. Statement (ii) accurately describes the Consumer Price Index (CPI) as a measure of price changes in a fixed basket of goods and services. Statement (iii) correctly expands on the CPI, noting it comprises various groups and subgroups, including food, transportation, and shelter indexes.

I to Construct a Special-Purpose Index Designed to Measure General