Practice What Is An Index Number (7.2) - Index Numbers

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6 sample questions

Question 1.
Define an index number.
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Think about what it measures over time.
Question 2.
What does the base period indicate in index numbers?
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Recall the starting point of comparison.
3Question 3.
What is the primary function of index numbers?
- To measure average changes
- To calculate exact prices
- To serve as a catalog
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Consider what index numbers summarize.
4Question 4.
True or False: Index numbers are only applicable to prices.
- True
- False
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Reflect on the broader applications of statistics.
Question 5.
Suppose the CPI in 2020 was 250 and in 2021 it is 300. Calculate the percentage increase in CPI.
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Use the percentage change formula.
Question 6.
A consumer's basket in the base year included items worth Rs. 500. If their current basket costs Rs. 650, what is the index number?
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Think of how index numbers reflect relative costs.

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