ANSWER TO FRAME 17.
YEAR
INCOME IN 1985 DOLLARS
1984
10,000 = 10,000 X 100
100
1985
9,722 = 10,500 X 100
108
1986
9,583 = 11,500 X 100
120
ANSWER TO FRAME 18.
YEAR
=
REAL COST OF MAINTENANCE
1985
=
427 = 350 X 100
82
1986
=
511 = 475 X 100
93
1987
=
560 = 560 X 100
100
1988
=
649 = 720 X 100
111
1989
=
627 = 840 X 100
134
FRAME 19.
As demonstrated above, a commonly used index is a price index used to compute the real
value, or value in constant dollars, of incomes and expenditures over various time periods. This
allows the analyst to compare like items over time, all measured with a constant standard.
Proceed now to the Practice Exercise for Lesson 1.
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