Purchasing Power of Money

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)

References in periodicals archive ?
t]he only difference between this situation [refraining from consumption in order to increase cash balances] and that of an increase in voluntary saving which is immediately and directly invested in the productive structure or capital markets is as follows: when saving manifests itself as a rise in cash balances, there is a necessary decline in the price of consumer goods and services and in the price of products in the intermediate stages, as well as an inevitable reduction in the nominal income of the original means of production and in wages, all of which adapt to the increase purchasing power of money.
It is customary to calculate the purchasing power of money in different time periods in Turkey by using this simit and tea combination.
Over the course of the last one hundred years the purchasing power of money has eroded at an average rate of 4.
It is not that the purchasing power of money is invariant-the goal of modern monetary theorists-but that it is not manipulated by the state.
Unlike a gold standard under which the purchasing power of money could increase, a central bank managed fiat currency can only decline in purchasing power.
The Index measures economic inflation and is a direct measurement of the purchasing power of money in various financial operations, which includes goods and services.
Inflation, in the sense that I used the term there, is a decline in the purchasing power of money, resulting in a general and prolonged rise in prices.
According to Lloyds TSB Private Banking, PS1 million in 1982 would provide the same value as PS3 million today, meaning the average purchasing power of money has fallen at an average rate of 3.
In an inflationary environment, the purchasing power of money is eroded, but the cake as a whole keeps growing, and everything else with it.
The broader point is that any entrepreneurial calculation must take into account expectations of the future (that is to say, uncertain) purchasing power of money.
Irving Fisher's The Purchasing Power of Money was received in 1911 as a forceful restatement and statistical verification of the quantity theory of money.
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.