The CPI will be most influenced by a 8%8% increase in price of which of the following consumption categories?Elimination ToolSelect one answerAEducation and communication.BApparel.CMedical care.DHousing.ERecreation.
Question
The CPI will be most influenced by a 8%8% increase in price of which of the following consumption categories?Elimination ToolSelect one answerAEducation and communication.BApparel.CMedical care.DHousing.ERecreation.
Solution
The Consumer Price Index (CPI) is most influenced by the consumption categories that make up the largest portion of consumer spending. In most countries, housing tends to be the largest category of consumer spending. Therefore, an 8% increase in the price of housing would likely have the most influence on the CPI. So, the answer is D. Housing.
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