Economy
Basket of Goods
Definition
A fixed set of consumer products and services used to calculate the Consumer Price Index (CPI) and measure inflation.
Explanation
Statistical agencies survey prices of hundreds of items — food, housing, energy, transportation, clothing, healthcare, education — weighted by how much a typical household spends on each category. The basket is updated periodically to reflect changing consumption patterns (e.g., streaming services replacing cable TV). Different baskets can produce different inflation rates.