CPI is calculated by the
Bureau of Labor Statistics
CPI is the measure of
average prices paid by consumers for a fixed basket of goods and
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The Consumer Price Index (CPI) measures the changes of the
prices paid by consumers for a fixed market basket of consumer goods and services
the Consumer Price Index measures the average prices paid by
urban consumers for a fixed market basket of goods and services.
For the CPI to provide an accurate measure of the prices paid by urban consumers, it is necessary to
have a market basket that is consistent and corresponds to what households actually purchase.
Constructing the CPI involves which of the following stages?
i. conducting the monthly price survey
ii. converting the CPI to an international index
iii. selecting CPI market basket
A) i only
B) ii only
C) iii only
D) i and iii
E) i, ii, and iii
D
The Consumer Expenditure Survey measures
households spending patterns
To measure the CPI, the BLS economic assistants check the prices of
A) about 8,000 goods and services every year.
B) about 8,000 goods and services every month.
C) about 80,000 goods and services every month.
D) about 80,000 goods and services every year.
E) only the goods and services whose prices have changed every month.
C
To measure the CPI, the BLS economic assistants check the prices of
A) all the goods and services produced in a given year.
B) some of the consumer goods but none of the services produced in a given year.
C) about 80,000 goods and services each month.
D) about 80,000 goods and services each quarter.
E) only the prices of the goods and services whose prices have changed.
C
Prices of goods and services in the CPI market basket are collected
monthly
The reference base period that the BLS uses to measure the CPI is
A) 1982-1984.
B) 1993-1995.
C) 1998-2000.
D) 1967-1969.
E) 2005.
A
The reference base period for the CPI has an index number of
100
The items included in the CPI are
goods and services consumed by the typical urban household
The Consumer Price Index market basket contains
goods and services purchased by an average urban household
The Consumer Price Index measures the average of the prices paid by urban consumers for a ________ of consumer goods and services.
fixed market basket
The CPI market basket is determined by
consumer survey
For the CPI, the market basket of good and services is modified
A) each time the Consumer Expenditures Survey is conducted.
B) about every 10 to 20 years.
C) each month when the Price Survey is completed.
D) each year to reflect changes in consumer purchasing habits.
E) at the discretion of the President.
A
According to the CPI basket, the largest item in the households' budgets is
A) food.
B) housing.
C) transportation.
D) education.
E) apparel.
B
What is the good or service is given the most weight in the CPI?
A) apparel
B) food and beverages
C) housing
D) transportation
E) recreation
C
The CPI market basket
A) contains one unit of each good purchased by the average consumer.
B) weights the goods and services according to the budget of an average urban household.
C) is comprised of a representative sample of the goods that the government guesses people buy.
D) includes only goods and not services.
E) includes only U.S.-produced goods and services.
B
The CPI market basket
A) weights the goods and services according to the budget of an average urban household.
B) determines the best possible way of taxing the average urban household.
C) determines how the spending patterns of the average urban household change from month to month.
D) determines how spending patterns change from urban household to urban household.
E) changes from one month to the next in order to calculate the CPI.
A
When calculating the CPI, the Bureau of Labor Statistics
A) weights the price of goods and services in the basket relative to the importance of the average urban household budget.
B) sums the prices of the goods and services in the average urban household consumption basket.
C) weights the price of all goods and services produced in a year within a country's borders.
D) multiplies by 100 the average price of goods and services in the average urban consumer's basket.
E) makes certain to weight the goods and services equally so that no one product is over-weighted.
A
The formula for the CPI is
A) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at next year's prices) × 100.
B) (Cost of CPI market basket at current period prices ÷ Cost of CPI market basket at base period prices) × 100.
C) (Cost of CPI market basket at base period prices ÷ Cost of CPI market basket at current period prices) × 100.
D) (Cost of CPI market basket this year × Cost of CPI market basket at base period prices) ÷ 100.
E) (Cost of CPI market basket this year × Cost of CPI market basket at base period prices) × 100.
B
If the prices of the goods and services contained in the CPI market basket increase from the base period to the next year, we know that
A) the inflation rate is falling.
B) the next year's CPI will be above 100.
C) the next year's CPI will be below 100.
D) the cost of the CPI market basket at next year's prices is lower than the cost of the CPI market basket at base period prices.
E) the market basket used by the BLS must be changed next year to reflect consumers' new expenditures.
B
The inflation rate is the
A) percentage change in the composition of the CPI market basket from the base year to the next year.
B) percentage change in the CPI from one year to the next year.
C) difference between the current period CPI and the base period CPI.
D) difference between the base period CPI and the current period CPI.
E) difference in the price level from one year to the next multiplied by 100.
B
The inflation rate measures the
A) average price of the goods and services consumed by urban consumers.
B) percentage change in the CPI from one year to the next year.
C) cost of the CPI market basket at current period prices divided by the cost of the CPI market basket at base period prices.
D) percentage change in the quantity of goods and services consumed by urban consumers.
E) cost of the CPI market basket at base period prices divided by the cost of the CPI market basket at current period prices.
B
Which of the following formulas is used to calculate the inflation rate?
A) inflation rate = 100 ×
B) inflation rate = 100 ×
C) Inflation rate = 100 ×
D) Inflation rate = 100 ×
E) inflation rate = 100 ×
C [Show Less]