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What is a market basket?

Market basket

In finance, a market basket refers to a list of terms used to track the progress of inflation in an economy or specific market. Market baskets are used by economists, politicians and financial analysts to track prices over time and define inflation levels.

Where have you heard about a market basket?

Market baskets are common, with perhaps the most common type referring to the basket of consumer goods that defines the Consumer Price Index (CPI). Another index defined by a market basket is the Producer Price Index (PPI).

What you need to know about a market basket.

Specifically, a market basket refers to a permanent mix of goods and services that are regularly sold and purchased via an economic system. As mentioned above, the Consumer Price Index (CPI) is perhaps the most common and widely used market basket; it measures spending patterns and price levels for urban consumers and urban wage earners, helping economists to predict consumer purchase trends. The CPI is also used as a deflating tool, a macroeconomic indicator and a method of adjusting monetary values.


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