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 ?
Because there is no meaningful one-day inflation rate, there is no statistical measure of anticipated changes in the purchasing power of money in a single day that can be used to measure a real return for one day.
It is a method of accounting for inflation in which the values of non-monetary items in the historical cost accounting system are adjusted using a general price index to show the change in the general purchasing power of money.
Nominal interest rates respond to shifting expectations about the future purchasing power of money.
So is our core understanding that inflation is ultimately a monetary phenomenon, and that protecting the purchasing power of money is a central bank's surest contribution to prosperity.
Our shared goal--the largest possible advance in living standards in the United States over time--can be best achieved if our actions ultimately allow concerns about the variability of the purchasing power of money to recede into the background.
Inflation expectations--Inflation is a critical factor in bond market performance because the purchasing power of money falls over time if the inflation rate is greater than zero.
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.
Irving Fisher had carefully distinguished between money and bank credit in stating his famous "equation of exchange" in The Purchasing Power of Money (Fisher 1911): MV + M'V' = PT, where M is the supply of money, M' the supply of bank credit, and V and V' referred to the "velocity of the circulation" of money and bank credit, respectively.
In order to cover this gap, I will analyze the quality of money and how its changes affect the purchasing power of money.
Inflation--the rate at which the purchasing power of money declines--is a big deal.
Core inflation measures attempt to strip away the most volatile relative price movements--like food and energy--which may temporarily cause an aggregate price measure to fluctuate in a way that does not reflect a persistent change in the purchasing power of money.
Department of Labor, adjusted semi-annually for inflation, will protect the purchasing power of money saved with Series I Bonds.