Purchasing Power of Money

The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

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)

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
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