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 manicure.

This is in the ____________________ category.

Answer 1

A manicure belongs to the 'Other Goods and Services' category of the Consumer Price Index (CPI), which includes personal care services like haircuts.

Step-by-step explanation:

A manicure would fall under the Other Goods and Services category of the Consumer Price Index (CPI). This category includes items such as tobacco and accessories, haircuts and other personal services, funeral expenses, and similar personal care services. The CPI is an important economic indicator that measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Considering the list you provided, where personal care services like haircuts fall under 'Other Goods and Services,' it is logical to categorize a manicure in this group as well. The Other Goods and Services category is one of the smaller components of the CPI, but it still plays a crucial role in reflecting the costs associated with personal care and services.