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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Definitions:

Fear of Heights

An anxiety disorder characterized by an irrational and excessive fear of heights, also known as acrophobia.

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses and anxiety through gradual exposure to the feared object or situation combined with relaxation exercises.

Placebo Technique

A harmless pill, medicine, or procedure prescribed more for the psychological benefit to the patient than for any physiological effect.

Exposure

Therapy technique that involves repeatedly exposing a client to an anxiety-producing stimulus or situation and has the goal of reducing the client’s fear.