Markets
Platforms
Accounts
Investors
Partner Programs
Institutions
Contests
loyalty
Trading Tools
Resources
A basket of goods is a fixed set of products and services used as a benchmark to measure the price level and inflation in an economy. This concept is central to calculating the Consumer Price Index (CPI) and other inflation indices. The basket typically includes items that are representative of the average consumer's spending habits, such as food, clothing, housing, transportation, and healthcare. By tracking the cost of this basket over time, economists can gauge changes in the purchasing power of money and the cost of living.
The CPI might track the price of a basket of goods that includes bread, gasoline, rent, and medical care to determine how much the cost of living has increased over a year.
• A fixed set of products and services used to measure inflation and cost of living.
• Central to calculating indices like the Consumer Price Index (CPI).
• Reflects the spending habits of the average consumer.
It allows economists to track inflation and understand changes in the cost of living over time.
It is selected based on the spending habits of the average consumer and may be adjusted periodically to reflect changes in those habits.
The CPI uses the basket of goods to measure how the overall price level is changing, indicating inflation or deflation.
Start Your Journey
Put your knowledge into action by opening an XS trading account today
Register to our Newsletter to always be updated of our latest news!
