A market basket is a collection of goods and services that are representative of the purchases made by a typical consumer or a specific demographic group. By tracking the prices of these goods and services over time, economists can measure changes in the cost of living and the overall inflation rate. Therefore, a market basket tracks how changing prices affect consumers.

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A Market Basket

Question 15

Multiple Choice

A market basket:

A) tracks how changing prices affect consumers.
B) tracks all the goods and services produced in an economy.
C) tracks the changes in price of items at the grocery store.
D) only tracks the changing prices of imports in an economy.

Correct Answer: