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What does purchasing power mean?

Purchasing power is the ability to pay goods and services

The purchasing power of someone indicates how much money there is to spend. Inflation is worth less money, so in high inflation, people can buy less and thus decrease purchasing power. The purchasing power depends on a number of factors: inflation, income, taxes. The concept of purchasing power is used to determine the development of income, or to define the differences in the welfare of households. Often the purchasing power of people also determines a certain policy that needs to be followed, for example it is determined that the purchasing power may decrease by a certain percentage.

Explanation buying power [YouTube] gIhwCEFLHhw [/youtube]

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