If the cost of health and personal care increases by 20 percent, then, other things the same, how much is the CPI likely to increase?

Question

Quizplus · Accepted Answer

The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Health and personal care is just one component of this basket. Given that it does not make up the entirety of the basket, a 20 percent increase in the cost of health and personal care would not lead to a proportional increase in the overall CPI. The actual impact on the CPI would depend on the weight of health and personal care in the CPI basket. Without specific weights, it's impossible to calculate the exact impact, but a 1 percent increase suggests a relatively small weight of health and personal care in the overall CPI basket, making it a plausible estimate.

If the Cost of Health and Personal Care Increases by 20