Purchasing power
What Purchasing power means in Economics B A-Level, as defined for Pearson Edexcel.
Definitions of Purchasing power
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Reference: Pearson Edexcel
The amount of goods and services money can buy, which diminishes for savings if the interest rate is lower than inflation.
The actual quantity of goods a sum of money can buy, which a real value calculation reveals.
Topics that use Purchasing power
- Appendix 3: Quantitative skills (Pearson Edexcel A-Level)
- Inflation (Pearson Edexcel A-Level)
Related terms
- Nominal values
- Real values
- Base year
- Business uncertainty
- Cost-push inflation
- Cross elasticity of demand
- Data interpretation
- Deflation
Using Purchasing power in the exam
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