The base period for an index number refers to the first period in the series of measurements.

1. The base period for an index number refers to the first period in the series of measurements.
2. Five years ago, a company experienced some extremely unusual events, including a major strike and a widely publicized health concern about one of its products. Since the firm tended to hit bottom during the time, the year would be a good choice as a base period for an index reflecting production volume.
3. The Dow Jones Industrial Average is an example of an index
4. The simple relative index is the most elementary form of an index number construction.
5. Simple relative indexes can be constructed for price or quantity, but not for value
6. For a simple relative price index, the base period is 1986 and the index value for 1989 is 120.0. This indicates that price increased 20% from 1986 to 1989.
7. A simple aggregate index can be viewed as a weighted aggregate index in which each component is a sign assigned the same weight.
8. A simple aggregate relative index is the sum of prices in the selected period divided by the sum of those in the base period, with the quotient being multiplied by 100
9. If one of the item in a simple aggregate price index is milk, the index will be unchanged if the price of milk is expressed in dollars per quart instead of dollars per gallon.
10. One of the problems with a simple aggregate quantity index is that the quantities may be expressed in different units.
11. In a Passche index, prices are weighted according to the quantities of the various items in the base period.
12. The Consumer Price Index is a simple aggregate index.
13. One application of the Consumer Price Index is to automatically increase wages or benefits through its inclusion in labor contracts.
14. "Real income" refers to the amount money available after government taxes have been paid.
15. The Producer Price Index measures changes in the physical volume or quantity of output of manufacturing, mining, and electric and gas utili­ties.

True of False