Definition of market basket
: a variety of consumer goods and services used to calculate a consumer price index
First Known Use of market basket
Financial Definition of 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.
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.
Learn More about market basket
Seen and Heard
What made you want to look up market basket? Please tell us where you read or heard it (including the quote, if possible).