Question 1
When studying economic data, index numbers are especially valuable when comparing
◦ relative movements in real and nominal variables.
◦ relative movements in different variables measured in different units.
◦ time-series data with cross-sectional data.
◦ linear and logarithmic data.
◦ government data with private-sector data.
Question 2
The base year for an index number is
◦ dependant upon the type of data.
◦ chosen arbitrarily by those who construct the data series.
◦ declared by the federal government.
◦ the year in which 2 or more index numbers are equal to 100.
◦ determined by the year the variable equals exactly 100.