In Computing the Consumer Price Index,a Base Year Is Chosen

question 52

Multiple Choice

In computing the consumer price index,a base year is chosen.Which of the following statements about the base year is correct?

• A)The base year is always the first year among the years for which computations are being made.
• B)It is necessary to designate a base year only in the simplest case of two goods;in more realistic cases,it is not necessary to designate a base year.
• C)The value of the consumer price index is always 100 in the base year.
• D)The base year is always the year in which the cost of the basket was highest among the years for which computations are being made.

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Definitions:

Scatterplot

A graphical representation using dots to show the relationship between two quantitative variables, helping to visualize any correlations.

Quantities X and Y

Refers to variables or values that are often used in mathematical equations or statistical models to represent data, measurements, or unknowns.

Association

A relationship or connection between two or more variables, where changes in one may be related to changes in the others.

Scatterplot

A type of graph used in statistics to visually display and compare two or more sets of related data.