Producer Price Index (pg. 464)
Which of the following is most often used as a measure of wholesale inflation?
a. Paasche Index
b. Consumer Price Index
c. Producer Price Index
d. Laspeyres Index
e. none of the above
weighted aggregate price index
A composite price index where the prices of the items in the composite are weighted by their relative importance is known in general as the (a) ___________.
a. price relative
b. weighted aggregate price index
c. Consumer Price Index
d. Producer Price Inde
quantity index
An index which is designed to measure the changes in quantities alone over time is know as the (a) __________?
a. time index
b. quantity index
c. Paasche Index
d. change index
e. none of the above
Consumer Price Index
which index is often used to measure inflation at a retail level in the USA?
a. Laspeyres Index
b. Paasche Index
c. Producer Price Index
d. Consumer Price Index
e. Industrial Production Index
real income (pg 462)
What is the ratio of national GNP (Gross National Product) to CPI (Consumer Price Index)[times 100] called?
a. measure of inflation
b. real GNP
c. real income
d. Producer Price Index
e. none of the above
inflation at the retail level
During rising prices, the Producer Price Index is normally a measure of which of the following?
a. deflation at the retail level
b. inflation at the retail level
c. deflation at the wholesale level
d. inflation at the wholesale level
e. none of the above
It is published monthly by the General Accounting Office.
The Consumer Price Index does not represent which of the following components?
a. It is published monthly by the General Accounting Office.
b. Prior to 1978 a market basket of approximately 400 goods and service was included.
c. After 1978 the market bask
Simple price index (465)
There are three general price index number and the one that calculates values for a single commodity is known as which of the following.
Laspeyres (pg 467)
Which price index uses the quantities of the base period in its calculations?
Paasche (pg 467)
Which price index uses the quantities of the reference period in its calculation?
a. Simple price index
b. Composite price index
c. Weighted price index
d. Laspeyres
e. Paashe
The base period quantities are not representative of the reference period.
Why would one select the Paasche index calculation over the Laspeyres?
All of the above
Examples of index number include which of the following?
a. Producer price index (PPI)
b. Industrial production index (IPI)
c. Dow-Jones Industrial average (DJIA)
d. Consumer price index (CPI)
e. all of the above
e. all of the above
Index number can be manipulated by doing which of the following?
a. Selecting a favorable base period
b. Selecting the content of the index number to favor certain outcomes
c. Ignoring quality improvements developed by technology
d. Mixing wholesale and r
a. true
The Laspeyres index number is a pure price index number? True or False
True
The Paasche index number is a pure price index number? True or False
index number
An __ __ measures the relative changes in price from one time period to another time period. (pg 458)
reference period
When measuring relative changes in price from one time period to another, what is the current time period referred to as?
base period
When measuring relative changes in price from one time period to another, what is the original time period referred to as?
1. CPI
2. PPI
3.IPI
4.DJIA
5 S&PCI
Name the Common Price Index Number? (458)
BLS (Bureau of Labor Statistics) www.bls.gov
Which Agency gives the latest value of the CPI, Unemployment Rate, Payroll Employment Changes, Average Hourly Earnings, the PPI, the ECI, Productivity Changes and a U.S. Import Price Index.
a. Bureau of Labor Statistics
b. Survey of Current Business/Burea
Survey of Current Business/Bureau of Economics Analysis (www.bea.gov)
Which agency allows to to determine trends in industry, business, construction, manufacturing, and wholesale trade.
a. Bureau of Labor Statistics
b. Survey of Current Business/Bureau of Economics Analysis
c. Employment cost Index
d. Monthly Labor Review
Employment cost Index (ECI)
To find information on the cost of employment measured by changes in compensation costs inducing wages, salaries, and employee benefit cost for non-farm private, state and local government employees which of the following is used?
a. Bureau of Labor Stati
Monthly Labor Review
To find historic and current information on the Employment Cost Index, Consumer Price Index, the Export Price Index and the Import Price Index, which of the following is used
a. Bureau of Labor Statistics
b. Survey of Current Business/Bureau of Economics
CPI-W
The _____ consisted of a market basket of 400 goods and services purchased by urban and clerical worker.
CPI-U
The _____ consisted of a market basket of about 3000 consumer products covering about 80% of the Nations population.
CPIW
This index base period was "pre-1978
CPIU
This index base period was from 1978 forward
1967
The previous base period was prior to CPI-W and CPI-U.
1988
The updated based periods from 1982 to 1984 was updated when?
100
A base period is equal to 100 on the index number scale and provides a benchmark to which all subsequent comparisons are made.
weighted
The CPI is a _____ index and totals 100%.
about every 10 years
How often are weighted index updated?
the weights are independent of any re-basing.
What makes CPI weighted index slightly different than Laspeyres Index
fixed-weight, aggregate price
When weights are independent of any re-basing this makes the CPI a ____, ____ index.
Economic Indicator
When the CPI is the most widely used measure of inflation and viewed as an indicator of the effectiveness of government economic policy it is called.
true
the Economic Indicator provides information about price changes in the nation's economy to government, business, labor, and private citizens and is used by them as a guide to make economic decision. True or false
inflation-free dollars
The CPI and its components are used to adjust other economic series for prices changes and to translate these series into ______.
Economic series
Examples of ____ ____ include retail sales, hourly and weekly earnings, components of the national income and product accounts.
purchasing power
The use of the CPI as a deflator of the value of the consumer's dollar is used to fine what?
change in the value, dollar
The purchasing power of the consumer's dollar measures the ______ to the consumer of goods and services that a ___ will buy on a different date.
declines
As prices increase, the purchasing owed of the consumer's dollar ____.
an Economic Indicator, as a Deflator of Other Economic Series and as a means of adjusting dollar values.
What three common uses of the CPI are they? The CPI is used as ___,___,___?
adjust consumers' income payments
What is the purpose of the Means of Adjusting Dollar Values.
Means of Adjusting Dollar Values
When the CPI is used to adjust consumer's income payments, adjust income eligibility levels for government assistance, and to automatically price a cost of living wage adjustments.
income tax
An example of how dollar values may be adjusted is the adjustment of the federal ____ ___ structure
bracket creep
When dollar value adjustments prevent inflation-induced increases in tax rate, it is called. 460
COLA
When the CPI is found imbedded in many union or labor contracts known as
doesn't' contain measures of tax payment
the first of the four weaknesses of the CPI is that it
doesn't account for quality changes in good
the second of the four weaknesses of the CPI is that it
does not account for leisure time
the third of the four weaknesses of the CPI is that it
does not scout for improvements in a variety of goods and services
the fourth of the four weaknesses of the CPI is that it
CPI inflation calculator
most recent year � previous year - 1 = inflation rate %
CPI deflation calculator
income � 1982-84 base � 100 = deflated series real income
GNP
The total monetary value of real output- productivity. the measure of actual increase in production of goods and services.
Product Index (PI)
Reference Period price index (RD) � base period price index (BP) � 100 =
inflation
The process of continuously rising prices or, equivalently, or the continuously falling value of money
Consumer Price Index (CPI)
The ___ measures inflation as experience by consumer in a day-to-day living expenses.
Producer Price Index (PPI)
The ___ measures inflation at earlier states of production and marketing process
Employment cost Index (ECI)
The ___ measures inflation in the labor market
BLS International Price Program
The ___ measures inflate for imports and exports
Gross Domestic Product (GDP) Deflator
The ____ combines inflationary measurement of governments, businesses and consumers.
intended use of the data
The "BEST" measure of inflation or a given application depend on the _____.
CPI
The ____ is general the best measure for adjusting payments to consumers when the intent is to allow consumers to purchase at todays prices, a market basket of goods and services equivalent to one that they could purchase in an earlier period. (pg. 464)
inflationary pressures
The financial markets tend to look at GDP as a good measure of ____ ____.
CPI
The ____ is also the best measure to translate retail sales and hourly or weekly earnings into real or inflation-free dollars
Simple Index Number (SIN)
Composite Index Number (CIN)
Weighted Index Number (WIN)
There are the Common Index numbers and the Basic Types of Index numbers? What are the three Basic Types of Index numbers
SIN
This index measures the relative change in price of a single good or service from the base period to the reference period.
Simple price Index calculation (SIN)
Reference period � base period X 100
base period � = price (not product) index
CIN
A price index for a market basket of goods and service.
simple price index and CIN
which two of the following are un-weighted index numbers.
a. SIN
b. WIN
c. CIN
the market basket is more than one while the simple is one item
What is the difference between a market basket and a simple index
WIN
which of the following is weighted index numbers.
a. SIN
b. WIN
c. CIN
Laspeyres and Paasche
What are the two processes to weighted indices
Laspeyres uses base period quantities
Paasche used reference period quantities
What is the difference between Laspeyres and Paasche weighted indices
CIN because it is higher
If the CIN is 160.7, the L - WIN is 135.7 and the P-WIN is 133.41 which index is best to argue increased wages and why?
Paasche - WIN because it is the lowest
If the CIN is 160.7, the L - WIN is 135.7 and the P-WIN is 133.41 which index is best to argue decreasing wages and why?
Advantages of Laspeyres Index Number
1. Quantity data is for only one time period (base)
2. This makes the quantity data constant so no other periods need to be tracked
3. Changes in the results of index number are all associated with price changes alone sine quantities reman constant. (only
Disadvantages of Laspeyres
Goods whose prices increase dominate the index
Buying pattern changes are not measured
Advantages of Paasche Index Number
Reflects changes in buying habits
Disadvangages of Paashe
Requires new quantity data each year ( each reference period)
Since there are two variable (price and quantity) which move at the same time, you can not attribute changes in the index to prices alone.
Part of the movement in the index number is due to pri
issues and concerns with price/cost analyses using index number
1. time sensitive issues
2. inflation/deflation can mask underlying prices
3. The price index series selected forsaking the price/cost adjustment should be closely related to the item being considered.
4. Use a market basket of raw materials, parts, and s
Examples of manipulations
1. selecting base periods that are too low causing inflated prices
2. selecting prices too high causing deflated prices
3. selecting unimportant or unrelated items for inclusion
4. Technological advances often create an issue for direction comparison of p
Quality
That which is necessary to attract and keep customers loyal to your product
Control
Those tools and techniques necessary to assure products meet the expectation of the consuming public even if they are sophisticated or less sophisticated
techniques and actions
Control includes the ___ and ___ taken by any organization to produce a quality product
Engineer and management
What are the two phases of Quality Control (QC)?
Engineer - where the product is designed and developed.
What is the first phase of QC?
Management - where the product moves into the production stage and process or the results are inspected.
What is the second phase of QC?
inspection and lot acceptance
What are the two sub-parts to the management stage
Walter Shewhart
Who made the first breakthroughs in product improvement when he recognized that variation in products was inevitable
W. Edwards Deming
Who is the leading pioneer in modern quality-control process?
W. Edwards Deming
Who initiated the idea of TQM (Total quality management).
TQM
The quality control from the top of the organizational chart to the worker in the plant.
Six Sigma
A quality measurement and improvement program that focuses on the control of the process to the port of +/- six sigma standard deviation from a centerline.
Just-in-time productions,
benchmarking,
team building,
re-engineering
Name the four (4) QC techniques
Just-in-time production
What is it when there are no extra materials and inventory are stored for us in the production process
Benchmarking
When a company will benchmark the best practices of the industry and adopt the best of the best
team building
A group of employees is appointed to address and solve quality issues with in the company
re-engineering
the process is evaluated for revisions
mean, range, p-chart and c-chart
Name the four Control charts
acceptable and unacceptable
Name the two (2) types of variations of the QC process?
common cause or chance
Acceptable is also known as ____ and ___ variations in which the customer will accept
Assignable cause or special cause variations
When unacceptable the company will identify the problem. this is called _____ or _____.
fishbone or cause and effect diagram
the _____ or ____ identifies 4 major components where are associated with the root cause of assignable cause variation
man, machine, methods, and materials
Name the (4) components of the fishbone design
short period of time
All assignable causes must be correctable in a _____.
mean and range charts
What are the two ordinal(measurement) scale control charts that are used to produce quantitative data for a process?
rational subgroups
Not developing sample (k) so that they span either a shift change or a raw material change or a machine maintenance process
mean chart
Which chart is designed to determine if the mean of the process is in or out of control.
three sigma (standard deviation)
What is the difference between QC and Six Sigma?
range chart
Which control chart measures variability
p-chart, c-chart
What are the two nominal or counting scale control charts that are used for acceptance based on the proportion of defects?
mean and range measure quantity - during production
the p and c charts measure quality - after production
What is the difference in the the mean and range charts compared to the p-chart and c-chart
p measures the proportion of defects in a series
c calculates the number of defects in a product
What is the difference between the p-chart and the c-chart?
p-chart
Which measure the proportion of defects in a series
c-chart
calculates the number of defects in a product
producers risk
the probability that sampling error will cause me to mistakenly reject that a shipment is good