I Besides Measuring Change in the Prices of Goods and Services

question 6

Multiple Choice

i. Besides measuring change in the prices of goods and services, the consumer price indexes have
A number of other applications. The CPI is used to determine real disposable personal income,
Deflate sales or other series, find the purchasing power of the dollar and establish cost of living
Increases.
ii. The concept of real income is sometimes called deflated income or income expressed in constant
Dollars and the CPI is called the deflator.
iii. To deflate sales, the actual sales are multiplied by the wholesale price index and the result
Multiplied by 100.

• 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.

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An agreement, usually secret, between two or more parties to limit competition and manipulate market prices or conditions.

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A sector of the television broadcasting industry that provides television services to consumers via coaxial or fiber-optic cables.