In Computing a Price Index

question 387

Multiple Choice

In computing a price index,

• A) the most recent year is always set equal to 100.
• B) both the quantities in the market basket and the prices change from year to year.
• C) the quantities in the market basket stay the same while the prices differ.
• D) the base year must be one for which the inflation rate was zero.

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Definitions:

Positively Skewed

A distribution of data where most of the values gather on the left side, with the tail extending to the right, indicating that the mean is greater than the median.

Median

The middle value in a sorted list of numbers, which separates the higher half from the lower half.

Mode

The value that appears most frequently in a data set, representing the highest peak in a distribution.

Extreme Values

The lowest or highest points in a data set, which are significant for analyzing behavior in statistical models, particularly in risk management and survival analysis.