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.

A motorcycle.

This is in the _________________ category.

Answer 1

A motorcycle belongs to the Transportation category of the Consumer Price Index, which encompasses vehicle-related expenses.

Step-by-step explanation:

A motorcycle would fall under the Transportation category of the Consumer Price Index (CPI). The Transportation category of the CPI includes expenses related to vehicles, such as new vehicles, airline fares, gasoline, and motor vehicle insurance.

Therefore, when considering the eight major groups of goods and services in the CPI, a motorcycle is included as part of the Transportation group.