purchasing power

The family's purchasing power increased after they saved for a year.

Definition

1. Noun:
   • Economic capacity: "purchasing power" refers to the amount of goods or services that a unit of currency (such as a dollar) can buy at a given time. It is a measure of the real value of money, indicating how much a consumer can acquire with their income or wealth.
   • Consumer ability: It also describes the financial capability of an individual, group, or population to buy products and services, often influenced by income levels, prices, and inflation.

Usage Examples

• Economic capacity:

  • Inflation reduces the purchasing power of the currency, meaning people can buy fewer goods with the same amount of money. (The value of money decreases, leading to less buying ability.)
  • A strong economy typically increases the purchasing power of its citizens. (People have more financial capacity to acquire goods.)

• Consumer ability:

  • The rise in wages has boosted the purchasing power of low-income families. (They can now afford more items than before.)
  • High housing costs can significantly lower a household's purchasing power. (Money spent on rent leaves less for other purchases.)

Advanced Usage

• "Purchasing power parity (PPP)": an economic theory that compares the relative value of currencies by the amount of goods they can buy in different countries.

  • Economists use purchasing power parity to adjust GDP figures for international comparisons. (PPP helps compare living standards across nations.)

• "To lose purchasing power": to experience a decline in the real value of money due to inflation or price increases.

  • Workers saw their purchasing power erode as prices rose faster than salaries. (Their ability to buy goods decreased over time.)

Variants and Related Words

• Purchasing power (n, no common variant): This term is a fixed compound noun and is not typically modified.
• Buying power (n, synonym): another term with the same meaning.
  • The buying power of the dollar has decreased this year. (Equivalent to purchasing power.)

Synonyms

• Buying power: the ability to purchase goods, often used interchangeably.
• Spending capacity: the financial ability to make purchases.
• Economic clout: influence derived from financial resources, sometimes used in broader contexts.

Phrasal Verbs

• There are no common phrasal verbs directly formed with "purchasing power," as it is a compound noun. However, related verbs include:
  • To purchase: to buy something.

    • She used her savings to purchase a new car. (To acquire by paying money.)
  • To have power over: to control or influence.

    • Large corporations have power over market prices. (They can affect purchasing power indirectly.)

Related Idioms

• "A dollar doesn't go as far": an idiomatic expression meaning that purchasing power has decreased.

  • With current inflation, a dollar doesn't go as far as it used to. (You can buy less with the same amount of money.)

• "To stretch a dollar": to make money last longer by careful spending.

  • She knows how to stretch a dollar by buying in bulk. (She maximizes her purchasing power through frugality.)