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5 Cards in this Set
- Front
- Back
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Babe Ruth, the famous baseball player, earned $80,000 in 1931. Today, the best baseball players can earn 200 times as much as Babe Ruth in 1931. However, prices have also risen since 1931. We can conclude that
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one cannot determine whether baseball stars today enjoy a higher standard of living than Babe Ruth did in 1931 without additional information regarding increases in prices since 1931.
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Which of the following agencies calculates the CPI?
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the Bureau of Labor Statistics
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In the CPI, goods and services are weighted according to
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how much consumers buy of each item
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How are the weights on the various goods and services in the CPI basket determined?
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a survey is conducted to determine how much of each good and service typical consumers purchase.
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The steps involved in calculating the consumer price index include, in order:
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fix the basket, find the prices, compute the basket's cost, choose a base year and compute the index
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