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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Purchasing Power

Definition:

In the Golden Age of Times Past a nickel bought you a candy bar. You had the power to purchase twenty candy bars with one dollar. Now a Big Hunk costs you a big chunk of change, $1. So the purchasing power of a dollar declined from then to now. Purchasing power is a measure of how much one unit of currency buys in a certain place or time compared to what it buys elsewhere. How much candy could you buy with $1 in Quebec?

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