Purchasing Power

Categories: Econ, Financial Theory

In the Golden Age of Times Past, a nickel bought you a candy bar. You had the power to purchase twenty candy bars with one dollar. Now a Big Hunk costs you a big chunk of change: say, $1. So the purchasing power of a dollar declined from then to now.

Purchasing power is a measure of how much one unit of currency buys in a certain place or time compared to what it buys elsewhere or, uh, elsetime.

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