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CDS 2025 · PYQ · Indian Economy / Inflation and Price Index · medium

While calculating the consumer price index, 'housing' as an item is classified as:

  1. A.Core consumer durable
  2. B.Core consumer non-durable
  3. C.Core capital goods
  4. D.Core service✓ Correct

Explanation

In the Consumer Price Index (CPI) calculation, 'housing' is classified as a core service. Core services include items like housing rentals, education, healthcare, and transport services that exclude volatile components like food and fuel. The housing component in CPI captures the cost of shelter (primarily rent) which is a service consumed by households. It is not a durable good (like furniture), non-durable consumer good (like food), or capital good. Core inflation, which excludes food and energy items, typically includes core services like housing as a major component.
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