Question

Eight major groups of goods and services are included in the Consumer Price Index (CPI):

1. Food and Beverages (breakfast cereal, milk, coffee, chicken, wine, full-service meals, snacks)

2. Housing (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)

3. Apparel (men's, women's, kid's clothes, jewelry)

4. Transportation (vehicles, airline tickets, gas, vehicle insurance)

5. Medical Care (prescription drugs, medical supplies, doctor's services, eyeglasses and eye care, hospital services)

6. Recreation (T.V., toys, pets and pet products, sports equipment, admissions)

7. Education and Communication (school tuition, postage, phone services, computers and accessories)

8. Other Goods and Services (tobacco and accessories, haircuts and other personal services, funeral expenses)

Using the list of eight groups of goods and services, determine which major group of the CPI the following item belongs to.

An iPhone.

This is in the _______________ category.

Answer 1

An iPhone fits into the Education and Communication category of the CPI, which tracks expenses such as phone services and technology products.

Step-by-step explanation:

An iPhone would be categorized in the Education and Communication category of the Consumer Price Index (CPI). This category includes expenses related to school tuition, postage, phone services, computers and accessories. Since an iPhone is a communication device and falls under the technology products (like computers and accessories), it is part of the Education and Communication goods and services group.

The CPI uses these categories to monitor changes in the cost of living, helping to understand economic inflation and the spending habits of consumers.