Suppose the Value of the CPI Is 1

question 72

Multiple Choice

Suppose the value of the CPI is 1.100 in year one, 1.122 in year two, and 1.133 in year three.Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three.The price level is increasing, the inflation rate is _______, and the relative price of computers is _________.

• A)decreasing; increasing
• B)increasing; increasing
• C)decreasing; decreasing
• D)increasing; decreasing

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Definitions:

Multiple Regression Model

A statistical technique that uses several explanatory variables to predict the outcome of a response variable, allowing analysis of the effects of the variables on the response.

Independent Variable

A variable in an experiment or study that is manipulated or categorized to observe its effect on a dependent variable.

Adjusted R Square

A statistical measure that indicates the proportion of variance in the dependent variable predictable from the independent variable(s), adjusted for the number of predictors in the model.

Variance

The square of the standard deviation, indicating how much the values in a set vary from the mean.