Suppose the Price Index Is 100 in the Base Year

question 2

Multiple Choice

Suppose the price index is 100 in the base year and the price of a pound of oranges in that year is $1.96.Now, if the price index changes to 105 in the following year, how much would a pound of oranges cost?

• A)$2.45
• B)$0.25
• C)$1.96
• D)$2.06
• E)$1.50

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Definitions:

Qualitative Variable

A variable that represents types or categories rather than numerical values.

Multiple Regression

An analytical approach that employs a number of independent variables to determine the outcome of a target variable.

Education Status

A classification representing the highest level of education an individual has completed.

Stepwise Regression

A statistical method of building a regression model by successively adding or removing variables based solely on the t-statistics of their estimated coefficients.