Consumer Prices

Business, Legal & Accounting Glossary

Definition: Consumer Prices




Full Definition of Consumer Prices


Consumer prices are the amount of money a person is willing to spend for a particular commodity. Consumer price index (CPI) is described as a measure that analyzes weighted average of prices of a basket of consumer services and goods like food and transportation. The consumer price index is computed by admitting price changes for each good or service in a preset basket. Price changes are then averaged and goods are then weighted in order of their importance. The consumer price index is also known as ‘cost-of-living index.

Consumer Packaged Goods (CPG)

It is a category of good that is used by almost all segments of the population. Goods of this category require to be supplanted several times in any given time period. Markets for CPGs are generally very competitive and characterized by low consumer switching costs. Examples of CPGs include tobacco, beverage, and food products.

Market Basket

A predetermined mix of products that are designed to imitate the performance of the total market. Market baskets comprise of a collection of items and are employed to track prices and inflation levels in a given economy.

Producer Price Index (PPI)

It is an index that gives information about inflation in the United States. PPI is bought out by US Bureau of Labor Statistics. Purpose of PPI is to examine the level of wholesale prices in the economy.

COLA

It is an abbreviated form of Cost of Living Adjustment. COLA is described as a yearly modification in wages to counterbalance an alteration in purchasing power that is assessed by the Consumer Price Index(CPI).

Economic Indicator

It is described as statistical data that displays general trends in a country’s economy. Economic indicators with predictive value are regarded as leading indicators. Coincident indicators are those that occur at the same time as associated economic activity. Lagging indicators are those that are exhibited only after an economic event takes place. Examples of economic indicators include consumer price index, GDP, stock market prices and unemployment.


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Definition Sources


Definitions for Consumer Prices are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 26th March, 2020 | 1 Views.