Using the 1989 base as a base, the price index for computers is now 125. What do

Question

Using the 1989 base as a base, the price index for computers is now 125. What does index number mean? this A. price of computers has decreased 25% since 1989 B. price of computers has increased 125% since 1980 D. none of the above three answers are correct 013: A economic indicator is one whose changes lag behind or follow changes in the economy A. Lagging B. Coincidence C. Leading 014: Some criticisms of the CPI include all of the following except: A the market basket used in the CPI may not reflect current spending priorities B. the CPI takes advantage of sale prices C. the CPI does not adjust for changes in quality D. the CPI does not measure prices for rural Americans ollowin sti n the followl The CPI's at the start of cach decade from 1940 to 1990 were: Year 1940 1950 1960 1970 1980 1990 CPI 14.0 24.1 29.6 38.8 82.4 130.7 as measured by the percentage change in Q15: What was the rate of ?nflation for the 1950's the CPI? 016: What was the rate of inflation for the 1960's, as measured by the percentage change in the CPI? of goods and services in 1998? 017: Name the major category added for the market basket 018: Tuition at University Z was $1100 per quarter in 1985 (CPI 107.6). How much should 175.1)? tuition be in 2001 adjusted for inflation (CPI The following 2 questions (Q19 to 020) are either "True" or "False" 019: basket Child care' is one of the eight major categories of goods and services in the market 020: The current 'base period' that we are on is 1982-1984.

Explanation / Answer

12

B. Price of the computer has increased 125% since 1989

Percentage number that shows the extent to which a price (or a 'basket' of prices) has changed over a period (month, quarter, year) as compared with the price(s) in a certain year (base year) taken as a standard. See also consumer price index.

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