purchasing power
Purchasing power refers to the amount of goods and services that a person can buy with a specific amount of money. It reflects how much your money is worth in relation to prices in the market. When prices rise, such as during inflation, purchasing power decreases because you can buy less with the same amount of money. Conversely, if prices fall, purchasing power increases, allowing you to buy more. Understanding purchasing power helps individuals assess their economic situation and make informed financial decisions.
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Purchasing power refers to the amount of goods and services that a certain amount of money can buy. It reflects the value of money in the economy, which can change due to inflation or deflation. When prices rise (inflation), purchasing power decreases because you can buy less with the same amount of money. Conversely, if prices fall (deflation), purchasing power increases as you can buy more. Understanding purchasing power is essential for making informed financial decisions and assessing the impact of economic changes on your everyday expenses.