| gen. |
consumer purchasing power (Consumer purchasing power measures the value in money for which consumers may purchase goods or services. Tied to the Consumer Price Index, or the Cost of Living Index as it is also known in the United States, consumer purchasing power indicates the degree to which inflation affects consumers' ability to buy. As a general rule, if income rises at the same rate as inflation, consumers can maintain their present standard of living. If, however, income rises faster than the rate of inflation, the standard of living will improve. By the same token, if inflation rises faster than income, even if wages and salaries also increase, then the standard of living will decline as consumers, although receiving more money in their paychecks, find their income inadequate to counteract rising prices. Alexander Demidov) |
