Final answer:
The index with 8 weighted categories including housing and food is the Consumer Price Index (CPI). It is the main measure of inflation in the U.S, representing consumer spending habits, with housing as the highest-weighted category.
Step-by-step explanation:
The index described in the question, which is comprised of weighted groups including housing, food and beverage, transportation, medical care, apparel, recreation, education/communication, and other goods and services, is the Consumer Price Index (CPI).
The CPI is calculated by statisticians who collect around 80,000 prices of individual products. These prices are combined using weights determined by consumer purchasing patterns, adjusted for factors like substitution and quality improvements, to create price indices for roughly 200 overall items. The price indices for these items are then combined to form the overall CPI. According to the CPI, housing is the most weighted category at 42.4%, followed by food and beverage at 15.1%. Apparel and other goods and services have the lowest weight at 2.7% and 3.2%, respectively.
The CPI is the most widely used measure of inflation in the United States, and it is crucial to differentiate it from other indices like the Producer Price Index (PPI), which measures prices at the producer level, and the GDP deflator, which includes the prices of all components of GDP.