purchasing power
purchasing power
Noun
This term describes the real value of money in terms of the volume of goods or services that one unit of currency can buy. It is a central concept in economics used to illustrate how inflation diminishes the actual value of a currency, even if the nominal amount of money remains the same.
In professional and academic contexts, it is often contrasted with nominal income. While nominal income refers to the face value of earnings, purchasing power reflects the actual standard of living. It is typically used in formal reports, financial news, and economic analyses rather than in casual daily conversation.
Meanings
Related Words
inflationdeflationcurrencymoneyincomewealthpricecostconsumerspendingeconomyfinancemarketvalueexchange ratestandard of livingreal incomenominal incomeconsumer price indexgross domestic productaffordabilitybudgetcapitalliquiditysolvencydemandsupplycommodityassetinterest ratemonetary policyfiscal policystagnationrecessiondepressionprosperitywagesalaryrevenueprofitexpenditureconsumptionutilitypurchasing power paritydevaluationrevaluationhyperinflationstagflationdisposable incomecreditdebtloansavingsinvestmentequitytrade balanceimportexporttariffsubsidytaxationfiscal yeareconomic growthbenchmarkindexationcost of livingbasket of goodsmarket valuenominal valueresourceeconomic indicatormoney supply