Final answer:
The Consumer Price Index (CPI) represents more than 200 categories grouped into eight major categories reflecting various sectors of the economy and consumer spending habits. Housing has the highest weight among them.
Step-by-step explanation:
The CPI, or Consumer Price Index, represents more than 200 categories of goods and services, which are included in eight major groups. These groups provide a detailed view of inflation and consumer spending patterns. The eight major categories are:
Food and beverages (breakfast cereal, milk, coffee, chicken, wine, full-service meals, and snacks)
Housing (renter's cost of housing, homeowner's cost of housing, fuel oil, bedroom furniture)
Apparel (men's shirts and sweaters, women's dresses, jewelry)
Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance)
Medical care (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
To give you a big explanation part, each of these categories has a weight in the CPI calculation, reflecting consumer spending patterns, such as housing being weighted the highest. This illustrates the relative importance of each category in the overall cost of living.
For the MCQ answer in the final answer: The CPI represents more than 200 categories of goods and services, each of which can be included in one of eight major groups.