The Consumer Price Index (CPI) measures the average prices of goods

Question

The Consumer Price Index (CPI) measures the average prices of goods and services purchased by consumers. In the United States, the CPI-U calculates the CPI for all urban consumers.

The CPI-U Is calculated based on prices of food, clothing, shelter, fuels, transportation fares, charges for doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living. All taxes directly associated with the purchase and use of items (such as, In the United States, sales taxes) are included in the index. An increase In CPI-U by a certain fractional amount means an increase by that fractional amount in overall prices within the relevant category.

For analyzing general price trends in the economy, seasonally adjusted prices are usually preferred over unadjusted prices because adjusting eliminates the effect of changes that normally occur at the same time and in about the same magnitude every year—such as price movements resulting from climatic conditions, production cycles, model changeovers, and holidays.

Percent Changes in CPI for All Urban Consumers (CPI-U), US City Average

______________________________ Seasonally adjusted changes from preceding month ______________
    Category  
  Mar
2010  
  Apr
2010  
  May
2010  
  Jun
2010  
  Jul
2010  
  Aug
2010  
  Sep
2010  
  Unadjusted
12 months
ended Sep 2010  
 
  All items 
 0.1 
 -0.1 
 -0.2 
 -0.1 
 0.3 
 0.3 
 0.1 
 1.1 
 
  Food (all) 
 0.2 
 0.2 
 0 
 0 
 -0.1 
 0.2 
 0.3 
 1.4 
 
  Food (at home) 
 0.5 
 0.2 
 0 
 -0.1 
 -0.1 
 0 
 0.3 
 1.4 
 
  Food (away from home) 
 0 
 0.1 
 0.1 
 0.1 
 0 
 0.3 
 0.3 
 1.4 
 
  Energy (all) 
 0 
 -1.4 
 -2.9 
 -2.9 
 2.6 
 2.3 
 0.7 
 3.8 
 
  Gasoline (all types) 
 -0.8 
 -2.4 
 -5.2 
 -4.5 
 4.6 
 3.9 
 1.6 
 5.1 
 
  Fuel oil 
 0.7 
 2.3 
 -1.4 
 -3.2 
 -1.6 
 0.9 
 0.8 
 11.8 
 
  Energy services 
 1.4 
 -0.5 
 -0.5 
 -1.6 
 0.8 
 0.4 
 -0.8 
 1.5 
 
  Electricity 
 2.1 
 0.7 
 -0.4 
 -2.2 
 0.5 
 0.2 
 -0.3 
 1.1 
 
  All items less food and energy 
 0 
 0 
 0.1 
 0.2 
 0.1 
 0 
 0 
 0.8 
 
  New vehicles 
 0.1 
 0 
 0.1 
 0.1 
 0.1 
 0.3 
 0.1 
 2.1 
 
  Used cars and trucks 
 0.5 
 0.2 
 0.6 
 0.9 
 0.8 
 0.7 
 -0.7 
 12.9 
 
  Apparel 
 -0.4 
 -0.7 
 0.2 
 0.8 
 0.6 
 -0.1 
 -0.6 
 -1.2 
 
  Services less energy services (all) 
 0.1 
 0.2 
 0.1 
 0.1 
 0.1 
 0 
 0.1 
 0.8 
 
  Shelter 
 -0.1 
 0 
 0.1 
 0.1 
 0.1 
 0 
 0 
 -0.4 
 
  Transportation services 
 0.4 
 0.4 
 0.4 
 0 
 0 
 0.1 
 0.3 
 3 
 
  Medical care services 
 0.3 
 0.3 
 0 
 0.4 
 0 
 0.2 
 0.8 
 3.7

For each of the following, select  Yes  if the statement is inferable from the given information. Otherwise select  No .

ID: 100362
 Question #2 based on the same table is available here

https://gmatclub.com/forum/download/file.php?id=51002

https://gmatclub.com/forum/download/file.php?id=51003

Kris01 · Accepted Answer

The changes in seasonally adjusted prices for used cars and trucks between March 2010 and September 2010 were in most cases less in magnitude than the changes in seasonally adjusted prices of new vehicles for the same period.

Lets check the first question.
It talks about the seasonally adjusted values for used cars and trucks and those for new vehicles. So, we need to only look at 2 rows(new vehicles and used cars and trucks)and all columns between March 2010 and September 2010(7 months). We are asked whether the for the majority of months, seasonally adjusted values for old cars and trucks is lesser than those for new vehicles. Since it talks about majority, we need to tabulate or compare values till we get upto 4 yeses or nos. Let's quickly tabulate that

New Vehicles Used cars and trucks
March 2010 0.1 < 0.5 No
April 2010 0.0 < 0.2 No 
May 2010 0.1 < 0.6 No
June 2010 0.1 < 0.9 No

Since, we have got four nos, we know that for the majority of months the answer is no. Since, we cannot infer the statement in question, the answer is no for this question.

2. The seasonally adjusted CPI-U for all items was higher in March 2010 than in the previous month.

This one asks us whether the seasonally adjusted values for all items in March 2010 was higher than Feb 2010. Now, we are not given the values for feb 2010. However, we know that at the top of the table it is mentioned that the Seasonally adjusted values given change from preceding month. Hence, the seasonally adjusted value for March 2010 is calculated from Feb 2010 and hence we just need to note whether the change for all items (the topmost row in the table) is positive for March 2010. It turns out it is(value=0.1). Since we can infer the statement in question, the answer is Yes.

3. The seasonally unadjusted change in the price of new vehicles in August 2010 over the previous month was about the same as the seasonally unadjusted change in the price of food away from home over the same period.

This one is tricky. It needs us to look for the seasonally  unadjusted  value which is the last column here. However, it wants us to compare the last column price change for new vehicles in august over preceding month with the last column price change of food away from home in the same period. We are not given this data and thus we cannot test the validity of this statement from the given data. Note here, we are not asked to confirm whether the data is right or not. We are asked to confirm whether the data can be inferred from the given data or not. Since, we cannot infer the data from the given information, the answer is no.

Let me know if this is clear or if you have any further doubts.

NL15 · Answer

Solution provided by Manhattan:

This table is ridiculous, isn’t it? And three paragraphs to start, before I even get to the question? There’s no way I’m possibly going to look through all of this data in 2.5 minutes. (Hint: that’s one clue to solving these kinds of questions!)

In general, on Integrated Reasoning tables, read the information that tells you what the table is about and look at all of the big labels (such as the column headers), but do NOT try to read / remember / understand all of the actual data points. You’ll use whatever data you need when you get a specific question about that data—but not before!

In this case, the first paragraph tells us that this CPI-U thing calculates average prices on a bunch of things for a certain population (urban consumers in the US). The second paragraph starts off by listing a bunch of categories—ignore them. If you need to know the specific categories, you can come back here later. In fact, ignore most of the details here until we figure out what the questions are about.

The third paragraph explains that we generally prefer to use seasonally adjusted prices. A quick glance at the table shows us that it includes both adjusted and unadjusted numbers. It also explains why—ignore this. Many, if not most, people will have used a minute or more at this point, so don’t spend that time now. If you need to know why, you can come back here later to understand.

Finally, glance at the table labels. The columns list a bunch of individual months from 2010 and those are labeled seasonally adjusted changes from preceding month. Notice two important things here: these numbers are seasonally adjusted, not unadjusted, and each monthly figure is based on the change from the preceding month. The final column is for a whole 12-month period and these numbers are unadjusted. Finally, there are a million individual categories listed in the rows. ?

I’m not 100% sure that I understand the difference between adjusted and unadjusted—but I don’t care about that right now. I’ll figure that out if I need to based on a specific question. Just keep going!

Now it’s time to examine the statements; here’s the first one:

The changes in seasonally adjusted prices for used cars and trucks between March 2010 and September 2010 were in most cases less in magnitude than the changes in seasonally adjusted prices of new vehicles for the same period.

Let’s see. They mention two categories: used cars and trucks and new vehicles. Great, I only need to look at those two rows. They also specifically mention adjusted for these, so I only care about the monthly columns. Scan until you find the right rows; luckily, they’re already right next to each other in the table.

The question asks about the magnitude of the changes in the two categories, so we need to compare them, month by month, to see which changed more and which changed less. For March 2010, the magnitude of change for used cars and trucks was 0.5, but only 0.1 for new vehicles. For that month, then, the magnitude of change was larger for the used cars and trucks. Compare the other months. In each case, the magnitude of change (the distance from zero) is larger for used cars and trucks. (This was true even in September 2010—the change was negative, but it was -0.7, which is 0.7 units away from 0. The magnitude of change for new cars was only 0.1.)

The statement says that the change for used cars and trucks was in most cases less in magnitude, but that’s not true. During all of the months in question, however, the change in magnitude (from zero) for used cars and trucks was greater.

Select No for statement 1.

Here’s the second statement:

The seasonally adjusted CPI-U for all items was higher in March 2010 than in the previous month.

This time, the statement is directing me to the all items category in the month-by-month (adjusted) timeframe. That’s right at the top of the table. We’re specifically asked about March 2010 compared to the previous month, but the table doesn’t include the previous month, so how can it tell us anything at all about February?

Read the labels! Right above the months, the table says Seasonally adjusted changes from preceding month. (Emphasis added.) In other words, the figure for March 2010 is based upon the change from February 2010. That change is positive, so it is true that the number for March is higher than the number for February.

Select Yes for statement 2.

And finally, our third statement:

The seasonally unadjusted change in the price of new vehicles in August 2010 over the previous month was about the same as the seasonally unadjusted change in the price of food away from home over the same period.

Read carefully! What data do they want now? Seasonally UNadjusted this time, not adjusted! The only data we have for the unadjusted category is based on the 12 months ended Sep 2010—we don’t have month-by-month data! Therefore, I can’t tell anything at all about what happened in August 2010 vs. July 2010—not for the UNadjusted data.

Note something very tricky. If you gloss over the Un in the word unadjusted, you might just go check the Aug and Jul columns for new vehicles and food away from home. For new vehicles, the change was 0.3. For food away from home, the change was 0.3. Those two numbers are the same—and so you would pick Yes, and you would fall into the trap. We don’t have any unadjusted data for the month of August alone.

Select No for statement 3.

The answers to the three statements are No, Yes, No.

Finally, notice something. How many rows and cells did you need in order to answer all three statements here? The first statement required us to use most of the cells in two adjacent rows. The second statement required us to use one cell in one row. The third statement required us to use nothing—but, even if we fell into the trap, we’d still only have used two cells in two different rows (one of which was a row we’d already used previously).

In other words, we never have to look at the vast majority of the data in this table. They could have cut out 3/4 of the rows without changing the question at all—except, perhaps, reducing the anxiety of a lot of test-takers when they saw a table with nearly 20 rows.

Key Takeaways for Integrated Reasoning Table Analysis Questions
(1) You will NOT need to use all of the data, so when you see a crazy number of rows or columns, don’t let yourself get anxious; instead, remind yourself that you won’t need to look at most of this. Ditto for those three paragraphs of text at the top. Don’t bother to read the table thoroughly or take in all of the data—just know what kind of information is available, then return to whatever you need based on the question statements.

(2) For many table questions, the ability to re-sort the data is critically important to our ability to answer these questions efficiently. Sometimes, though, we don’t need to sort the data at all—as in this case. Learn how to decide when and how to re-sort the data.

(3) Read carefully. When you have a table, by definition, the questions are going to hinge around whether you’re examining the right cell or cells from the table. Make sure you read the statements carefully with this question in mind: What group/category are they asking me about now?

URL: https://www.manhattanprep.com/gmat/blog ... -analysis/

hitman5532 · Answer

The thing that bothers me with question like the third one, is when they ask, "was about the same".

What qualifies as "about the same"? 10% 20%?

How should we approach the subjective and ambiguous term, "about the same"? Or something simliar like, " slighty more/less"?

plumber250 · Answer

Hi Hitman,

It's actually a clue that the answer is likely to be false... as you say it's hard to work out exactly what that means...

In this instance read the question carefully. It's asking about 'unadjusted' prices - but all the monthly data we ahve is for 'adjusted' so we can;t have enough info.

So in this instance, we don't need to stress about what counts as about the same...

James

sameerspice · Answer

I hope below explanation will help:
1) I observed the number of time values was constant (no change in % of CPI(U), for ALL Item it was only 1 instance between July & Aug for the given period however for other item it was 2 (Mar-apr, aug-sep): Hence Answer => True
2) Straight forwards, whatever be the value of %, the value has decreased from 0.5 to .3, so regardless, what ever may be the case. It couldn't have increased in any universe. - FALSE
3) May (CPI-U) = 0.1% Sep Value: 0%: Clearly value much have decreased for CPI -U to be Zero.: - FALSE

I am open to learn, if there is better way to solve it.

bb · Answer

A bit late with the reply. In this case, Question 2 is fairly straightforward. you just to look at the 0.1 in the very first cell (A1), which indicates the prices have gone up by 0.1 since the previous month. Thus it was higher.

bethanyh · Answer

Posting a reply to this- agree with previous users that the meaning of something being "inferable" is confusing and still trying to wrap my head around 1. I'm trying to figure out whether something being inferable means it's TRUE/FALSE or that we have the data to figure out if it's TRUE/FALSE. I think it has to do with having the data to figure out if it's true or false, given the answer to #3.

OAs are 1) No 2) Yes 3) No.
 
2's answer makes sense because you can infer that information from the chart- March 2010 is positive which means it increased from Feb 2010. 3's answer makes sense because we don't have the unadjusted for individual items- we cannot say if it is even true or false.

Now 1 didn't make sense until I thought about the specific wordings for magnitude- we don't have the absolute values of changes in seasonally adjusted prices (just percentage changes), hence we cannot determine magnitude.

Apt0810 · Answer

1)No,since the overall change changes in seasonally adjusted prices for transportation services between March 2010 and September 2010 were, on average is +ve while l the changes in seasonally adjusted prices of energy services for the same period is negative.

2)Yes,The seasonally adjusted price for used cars and trucks was higher in Sep 2010 than it was in Mar 2010.
Since in March it has only seen an increment of 0.5% while in September the overall increment is higher.

3)Yes,The magnitude of the seasonally unadjusted price change of apparel in Sep 2010 over the previous year was more than the combined seasonally adjusted price changes in Mar 2010 and Apr 2010 over their respective previous month. Since in September it is -0.6 while in March and April it is -1.1

Posted from my mobile device

Sajjad1994 · Answer

Official Explanation

1. For each of the following, select Yes if the statement is inferable from the given information. Otherwise select No.

In the table, the absolute values of the numbers in the "Seasonally adjusted changes from preceding month" columns represent the magnitudes of seasonally adjusted changes. In each of the seven columns representing the months from March 2010 through September 2010, the absolute value of the number in the "Used cars and trucks" row exceeds that of the number in the "New vehicles" row. Thus, in every month shown during this period, the magnitude of the change in seasonally adjusted prices for used cars and trucks is greater, not less, than that of the change in seasonally adjusted prices for new vehicles.

The correct answer is No.

The number at the intersection of the "Mar 2010" column and the "All items" row is 0.1. As the table title and the multicolumn header indicate, this means the seasonally adjusted CPI-U for all items collectively was 0.1% higher in March 2010 than it was in the preceding month.

The correct answer is Yes.

The only seasonally unadjusted changes in prices shown in the table are those in the final column, which are for the whole 12-month period ending September 2010. The table contains no information about seasonally unadjusted changes in prices between any specific month and the preceding month.

The correct answer is No.

jabhatta2 · Answer

VeritasKarishma  - focussing on the question stem specifically

What is the accurate re-wording of the blue above in your view ? Is it

Rewording attempt I) "Is the statement true or false" ? Select "Yes" if true or select "No" if false. 
OR 
Rewording attempt II) "Is the information given in the table sufficient to answer the question" ?

If it is  rewording attempt # 1   then the OA solution to the 3rd question doesnt make sense in my view.

The solution given to the 3rd question is "NO", not because statement 3 is "FALSE" but because data from the table is just not available to confirm if the 3rd statement is True OR false to begin with

What are your thoughts

KarishmaB · Answer

"Inferable" means "Can I say that it is true?"

So to know whether you can infer a statement, select "Yes" if you can say that it is true and select "No" if it is not true or you don't know enough.

kanwar08 · Answer

For Prompt 1, Magnitude means  absolute size of the change , ignoring whether it’s an increase or decrease.

Example: a change from +0.1 to -0.2 means a magnitude of 0.3. So, -0.7 means a magnitude of 0.7.

Don't confuse it with the absolute value of change. In that case you might assume we need the base amount for finding the magnitude i.e. 0.1% of X. (X = Base)

boybread5 · Answer

I got this wrong initially, but I think this is really a classic "read carefully" question.

First, the instructions: "For each of the following, select Yes if the statement is  inferable  from the given information." Notice it doesn't ask for whether the statement is true. So, similar to a DS question, you have to just be able to prove the answer is right.

1. I got this question wrong because of misreading. Notice the statement says: "The changes in seasonally adjusted prices...were in most cases less in magnitude than." Two things this should tell you. First, the direction (positive or negative) doesn't matter, just the magnitude (almost like an absolute value). Second, you would need to know the actual average price of the good because the questions is asking about changes in price. Because we don't have the actual average price for any of these goods / services, this statement cannot be inferred. So, No.
2. This can be inferred since March contains a month-over-month comparison.
3. Because we don't know the exact mechanism for seasonality adjustment, we cannot infer that statement.

The Consumer Price Index (CPI) measures the average prices of goods

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Category	Mar 2010	Apr 2010	May 2010	Jun 2010	Jul 2010	Aug 2010	Sep 2010	Unadjusted 12 months ended Sep 2010
All items	0.1	-0.1	-0.2	-0.1	0.3	0.3	0.1	1.1
Food (all)	0.2	0.2	0	0	-0.1	0.2	0.3	1.4
Food (at home)	0.5	0.2	0	-0.1	-0.1	0	0.3	1.4
Food (away from home)	0	0.1	0.1	0.1	0	0.3	0.3	1.4
Energy (all)	0	-1.4	-2.9	-2.9	2.6	2.3	0.7	3.8
Gasoline (all types)	-0.8	-2.4	-5.2	-4.5	4.6	3.9	1.6	5.1
Fuel oil	0.7	2.3	-1.4	-3.2	-1.6	0.9	0.8	11.8
Energy services	1.4	-0.5	-0.5	-1.6	0.8	0.4	-0.8	1.5
Electricity	2.1	0.7	-0.4	-2.2	0.5	0.2	-0.3	1.1
All items less food and energy	0	0	0.1	0.2	0.1	0	0	0.8
New vehicles	0.1	0	0.1	0.1	0.1	0.3	0.1	2.1
Used cars and trucks	0.5	0.2	0.6	0.9	0.8	0.7	-0.7	12.9
Apparel	-0.4	-0.7	0.2	0.8	0.6	-0.1	-0.6	-1.2
Services less energy services (all)	0.1	0.2	0.1	0.1	0.1	0	0.1	0.8
Shelter	-0.1	0	0.1	0.1	0.1	0	0	-0.4
Transportation services	0.4	0.4	0.4	0	0	0.1	0.3	3
Medical care services	0.3	0.3	0	0.4	0	0.2	0.8	3.7

Yes	No
		The changes in seasonally adjusted prices for used cars and trucks between March 2010 and September 2010 were in most cases less in magnitude than the changes in seasonally adjusted prices of new vehicles for the same period.
		The seasonally adjusted CPI-U for all items was higher in March 2010 than in the previous month.
		The seasonally unadjusted change in the price of new vehicles in August 2010 over the previous month was about the same as the seasonally unadjusted change in the price of food away from home over the same period.

Yes.................	No...................
		The changes in seasonally adjusted prices for used cars and trucks between March 2010 and September 2010 were in most cases less in magnitude than the changes in seasonally adjusted prices of new vehicles for the same period.
		The seasonally adjusted CPI-U for all items was higher in March 2010 than in the previous month.
		The seasonally unadjusted change in the price of new vehicles in August 2010 over the previous month was about the same as the seasonally unadjusted change in the price of food away from home over the same period.

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The Consumer Price Index (CPI) measures the average prices of goods

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