Purchasing power
Description:
Investopedia.com: "The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy." At times of high inflation, cash is worth less on the market, meaning that a loaf of bread will cost the same based on value, but measured in cash it is more expensive. If something costs 2 euros, but there is a time of hyperinflation, you would need, say, 2000 euros for that same loaf of bread. Inflation is that which decreases the purchasing power of money; it is this that allowed you to buy a load of bread for 10 cents a few decades ago. In order to purchase goods not necessary for survival, a currency needs to be strong and a person needs to be employed with a good salary.
Enablers:
- Increased inflation
- Interest rates
- (Un)employment rate
- Consumer Price Index
Inhibitors:
- Decreased inflation
- Industry economy
- High import/export ratio
Paradigms:
Old: A much larger and complex market with many different currencies in Europe alone. New: Trading predominantly in Euro, Yen, Yuan, and Dollar. Stronger currency in whole of Euro-holding countries.
Experts:
Timing:
Web Resources:
Investopedia Purchasing power The Concise Encyclopedia of Economics: Inflation by David Ranson