Assume an Economy That Makes Only One Product and That

question 171

Multiple Choice

$$\begin{array} { | c | c | c | } \hline \text { Year } & \text { Units of Output } & \text { Price Per Unit } \\\hline 1 & 3 & \$ 3 \\\hline 2 & 4 & 4 \\\hline 3 & 6 & 5 \\\hline 4 & 7 & 7 \\\hline 5 & 8 & 8 \\\hline\end{array}$$ Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a ?ve-year period are shown in the table. The price index for year 1 is

• A) 140.
• B) 40.
• C) 167.
• D) 60.

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Definitions:

Life Satisfaction

An evaluation of how one’s life is generally and how it compares to some standard.

Positively Correlated

Describes a relationship between two variables where they move in the same direction, meaning as one variable increases, the other also increases, or as one decreases, so does the other.

Correlation Coefficient

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Correlational Approach

A nonexperimental method in which the researcher merely observes whether variables are associated or related.