Irons
purchasing power is an
a. economic measurement that determine changes in the
purchasing power of a dollar
o
b. amount of goods that can be purchased with a unit of currency
c. economic condition in which there is a decline in the price of
goods and services
o
d. economic condition in which money loses its purchasing power
and prices rise
previous

Purchasing power is the;

B. amount of goods that can be purchased with a unit of currency

Explanation:

The purchasing power is a measure of the value of a currency by determining how much of the goods and services a unit of that currency is able to purchase. It is always used to gauge how strong a currency is. The purchasing power is however affected by inflation. Inflation tends to reduce the quantity of goods or services that one can buy using a unit of currency.

This is because inflation causes a sudden spike in the price of goods and services in the economy, when this happens most people tend to only spend on needs rather than wants since their ability to purchase has been greatly reduced. A typical example is a case where ten years the amount that one could purchase property is definitely lower than the price of the same property now. This means that the purchasing power ten years ago is higher than the purchasing power now.

The purchasing power has the ability to affect different aspects of the economy. An example is the cost of living. When the purchasing power reduces, the people pay more for a good or service leading to a high cost of living.

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