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10 February, 09:06

Why is a hypothetical basket of goods used to measure inflation?

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  1. 10 February, 09:21
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    Because consumers can see the general increase in price over time by using a basket of goods. In addition, Inflation is often measured by evaluating alterations in the cost of a fixed basket of goods and services. This technique overestimates inflation because it does not account for alterations in outgoings patterns that outcome from comparative price variations.
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