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TERM OF THE DAY

Purchasing power is the value of a currency expressed in terms of the number of goods or services that one unit of money can buy. It can weaken over time due to inflation. That's because rising prices effectively decrease the number of goods or services you can buy. Purchasing power is also known as a currency's buying power.

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The Consumer Price Index (CPI) measures change over time in the prices paid by consumers for a representative basket of goods and services. Read more

Inflation: What It Is, How It Can Be Controlled, and Extreme Examples

Inflation is a decrease in the purchasing power of money, reflected in a general increase in the prices of goods and services in an economy. Read more

Cost of Living: Definition, How to Calculate, Index, and Example

The cost of living is the amount a person needs to spend to cover basic expenses such as housing, food, taxes, and healthcare in a particular place. Read more

What Is Purchasing Power Parity (PPP), and How Is It Calculated?

Purchasing power parity (PPP) compares economic growth and standards of living in different countries with a common currency/basket of goods approach. Read more

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