Purchasing power
What Purchasing power means in Economics GCSE, as defined for AQA.
Definitions of Purchasing power
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Reference: AQA
The amount of goods and services each pound can buy, which falls as the general price level rises.
What income can buy in goods; inflation reduces it if wages do not rise at the same rate.
The amount of goods and services that money can buy, which falls when inflation occurs.
Topics that use Purchasing power
- Inflation and price stability (AQA GCSE)
Related terms
- Aggregate demand
- Consumer Price Index (CPI)
- Consumer Prices Index
- Cost-push inflation
- Demand-pull inflation
- Fiscal policy
- Index numbers
- Inflation
Using Purchasing power in the exam
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