Question

why does purchasing power decrease when price increase? Please explain

Answer 1

Answer:

Understanding Purchasing Power

Inflation reduces a currency's value and thus purchasing power because it essentially increases prices. To measure purchasing power in the traditional economic sense, compare the price of a good or service against a price index like the Consumer Price Index.

Answer 2

Answer:

Inflation reduces a currency's value and thus purchasing power because it essentially increases prices. To measure purchasing power in the traditional economic sense, compare the price of a good or service against a price index like the Consumer Price Index.

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