Basket Of Goods
Definition of 'Basket Of Goods'A relatively fixed set of consumer products and services valued and used on an annual basis to track inflation in a specific market or country. The goods in the basket are often adjusted periodically to account for changes in consumer habits The basket of goods is used primarily to calculate the Consumer Price Index (CPI). |
|
Investopedia explains 'Basket Of Goods'When conceptualizing a basket of goods, it is best to imagine a shopping basket. The basket contains everyday products such as food, clothing, furniture and financial services. As the products in the basket increase or decrease in price, the overall value of the basket changes. The CPI compares the value of the basket each year and determines the level of inflation for that period. The contents of the basket are subject to change each year. |
Related Definitions
Articles Of Interest
-
Forces Behind Interest Rates
Get a deeper understanding of the importance of interest rates and what makes them change. -
Why The Consumer Price Index Is Controversial
Find out why economists are torn about how to calculate inflation. -
Curbing The Effects Of Inflation
Your investments suffer when general price levels rise. Learn how you can control the damage with IPSs. -
What You Should Know About Inflation
Find out how this figure relates to your investment portfolio. -
Cost-Push Inflation Versus Demand-Pull Inflation
Gain a deeper understanding of aggregate supply and demand, forces which raise the price of goods and services. -
Introduction To Treasury Inflation-Protected Securities (TIPS)
If you want to protect your portfolio from inflation, all you need are a few TIPS. -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. -
Breaking Down The Balance Of Trade
The balance of trade is a key indicator of a nation’s health. Investors and market professionals appear more concerned with trade deficits than trade surpluses, since chronic deficits may be ... -
Open Market Operations Explained
The term “open market operations” refers to a monetary policy tool in which central banks buy and sell bonds to regulate the money supply in the economy. The United States employs open market ... -
How To Profit From Inflation
Inflation - defined as a sustained increase in the price of goods and services - seems to be inevitable. While rising prices are bad news for consumers, as it takes an ever-increasing amount ...
Free Annual Reports