Consider the Following Table That Provides the Simple Price Indices

question 23

Short Answer

Consider the following table that provides the simple price indices for an item from 2006 through 2008.
A) If the price of the good in 2006 was $8, compute the price in 2008.
B) If the base year is changed to 2007, compute the value of the updated simple price index in 2008

• A) If the price of the good in 2006 was $8, compute the price in 2008.
• B) If the base year is changed to 2007, compute the value of the updated simple price index in 2008

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Definitions:

Median

The middle value in a data set when the values are arranged in ascending or descending order.

Negative Correlation

A relationship between two variables where one variable increases as the other decreases.

Variable Increases

A situation in which the value of a variable becomes larger.

Relative Frequencies

The ratio of the number of times a particular value occurs to the total number of observations, used in statistical analysis.