As Chief Statistician for the County,you Want to Compute and Publish

question 45

Multiple Choice

As chief statistician for the county,you want to compute and publish every year a special-purpose index,which you plan to call Index of County Business Activity. Three series seem to hold promise as the basis for the index; namely,the price of cotton,the number of new cars sold,and the rate of money turnover for the county (published by a local bank) . Arbitrarily you decide that money turnover should have a weight of 60 percent; number of new cars sold,30 percent; and the price of cotton,10 percent. What is the Index of County Business Activity for 1981 (the base year) and for 2006?

• A)100 for 1981,139 for 2006
• B)139 for 1981,100 for 2006
• C)100 for 1981,61 for 2006
• D)100 for 1981,100 for 2006

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Definitions:

Corporate Income Taxes

Taxes imposed on the net income (profit) of corporations, determined by the legal jurisdiction of the business operations.

Depreciation

Depreciation refers to the reduction in the value of an asset over time due to wear and tear, obsolescence, or age.

Capital Equipment

Long-lasting goods that are utilized in the production of other goods or services, such as machinery, buildings, and vehicles.

Inventories

Stocks of goods and materials that businesses maintain to meet customer demand without delays.