market basket

noun
Updated on: 13 Oct 2017

Definition of market basket

:a variety of consumer goods and services used to calculate a consumer price index

Recent Examples of market basket from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'market basket.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of market basket

1943


Financial Definition of MARKET BASKET

market basket

What It Is

A market basket is a group of items that simulate the overall price movements in a market.

How It Works

At an economic level, a market basket is a permanent set of goods and services that are bought and sold as staples in a functional economy. Analysts and policymakers use average price changes in a market basket as the primary gauge of inflation. For example, the Consumer Price Index (CPI) is based on a market basket of consumer goods and services.

In the financial markets, a market basket includes a group of widely-held securities. An example would be the Dow Jones Industrial Average (DJIA).

Why It Matters

A market basket serves as a benchmark for measuring the price performance of other items in a market. The quality of a particular market basket is apparent in how closely the behavior of items in a market basket resembles the behavior of the overall financial market or the economy as a whole. Market baskets give investors and policy makers a simpler way of measuring and predicting market trends.


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