Question : 7.1   The Consumer Price Index 1) The CPI stands for A) Citizens : 1228272

7.1   The Consumer Price Index

1) The CPI stands for

A) Citizens Paying Index.

B) Corporate Pricing Index.

C) Consumer Paying Index.

D) Consumer Price Index.

E) Corporate/Consumer Payment Index.

2) The Consumer Price Index is calculated by the

A) Bureau of Labor Statistics.

B) Department of Labor.

C) Department of Commerce.

D) Federal Reserve Bank of New York.

E) Society for Consumer Protection.

3) The CPI is a measure of the

A) percentage change in the price level.

B) average prices of all goods.

C) average prices paid by consumers for a fixed basket of goods and services.

D) average prices of all goods and services produced.

E) average change in the output of the goods and services purchased by a typical urban consumer.

4) The Consumer Price Index (CPI) measures the changes of the

A) prices paid by consumers for a fixed market basket of consumer goods and services.

B) quantities of a fixed market basket of goods produced by businesses.

C) lowest prices paid by consumers for a fixed market basket of consumer goods and services.

D) prices paid by all businesses for a fixed market basket of production resources.

E) prices paid by consumers and businesses for a fixed market basket of goods and services.

5) The Consumer Price Index measures the average prices paid by

A) businesses for a fixed market basket of resources.

B) businesses for the most frequently used basket of resources.

C) urban consumers for a fixed market basket of goods and services.

D) urban consumers for the goods and services that most frequently change in price.

E) businesses and consumers for a market basket of goods and services.

6) For the CPI to provide an accurate measure of the prices paid by urban consumers, it is necessary to

A) assign equal weights to all the goods and services included in the market basket surveyed so that nothing is over-weighted.

B) have a market basket that is consistent and corresponds to what households actually purchase.

C) have prices stated in dollars so consumers can compare what they spend.

D) change the market basket each month to reflect the changes that consumers make.

E) make certain that the incomes of the consumers surveyed do not change because such a change would affect the market basket of the goods and services they buy.

7) The CPI is calculated by the Bureau of Labor Statistics on a frequency of every

A) week.

B) month.

C) quarter.

D) year.

E) decade, along with the Census.

8) Constructing the CPI involves which of the following stages?

i.conducting the monthly price survey

ii.converting the CPI to an international index

iii.selecting CPI market basket

A) i only

B) ii only

C) iii only

D) i and iii

E) i, ii, and iii

9) The Consumer Expenditure Survey measures

A) households’ spending patterns.

B) the wholesale price on what consumers buy so that a markup percentage can be found.

C) the maximum price buyers will pay for a good or service.

D) consumers’ incomes.

E) the jobs at which consumers work.

10) To measure the CPI, the BLS economic assistants check the prices of

A) about 8,000 goods and services every year.

B) about 8,000 goods and services every month.

C) about 80,000 goods and services every month.

D) about 80,000 goods and services every year.

E) only the goods and services whose prices have changed every month.