Definition of 'Market Basket'
The market basket is an important tool for economists and policymakers because it provides a way to measure the cost of living and the overall health of the economy. The inflation rate is a key indicator of economic growth, and the market basket is used to calculate the inflation rate.
The market basket is not static, and it is periodically updated to reflect changes in consumer spending habits. This is done to ensure that the basket is representative of the current economy. The items in the basket are also weighted to reflect their relative importance in the consumer's budget.
The market basket is a complex and important concept, and it is used by a variety of organizations, including the government, businesses, and economists. It is a valuable tool for understanding the economy and making informed decisions about financial matters.
Here are some additional details about the market basket:
* The market basket is typically made up of about 200 items.
* The items in the basket are selected by a government agency or independent organization.
* The prices of the items in the basket are collected on a regular basis, such as once a month or once a quarter.
* The changes in prices are used to calculate the inflation rate.
* The inflation rate is a measure of the average increase in prices over time.
* The inflation rate is used to compare the cost of living in different countries and over time.
* The market basket is an important tool for economists and policymakers because it provides a way to measure the cost of living and the overall health of the economy.
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