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Purchasing Power of Money

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Purchasing Power of Money 

the capacity of a monetary unit to be exchanged for a certain quantity of goods. It is expressed in the exchange ratios that form between money and goods. The purchasing power of money depends on factors related both to goods (changes in the cost or prices) and money (changes in the cost of the metal used for coins and, for paper money, change in the amount in circulation). The purchasing power of money is closely connected with the effective monetary demand of the population. [20–499–1)



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“Gold, along with other asset prices, can tell us if there is an erosion in the general purchasing power of money rather than just the cost of current consumption.
Lakhdar Moussi: Portfolio management strategies start by defining strict guidelines in terms of purpose; the products that we intend to promote will aim at preserving the purchasing power of money collected.
On top of that, with day-to-day price rises outstripping interest paid on the vast majority of accounts, the purchasing power of money put away is shrinking rather than growing.
 
 
 
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