what is purchasing power 
purchasing power is the value of a currency expressed in terms of the number of goods or services that one unit of money can buy it can weaken over time due to inflation that s because rising prices effectively decrease the number of goods or services that one unit of money can buy purchasing power is also known as a currency s buying power in investment terms purchasing or buying power is the dollar amount of credit available to a customer based on the existing marginable securities in the customer s brokerage account investopedia julie bangunderstanding purchasing powerpurchasing power affects every aspect of economics from consumers buying goods to investors buying stock to a country s economic prosperity inflation reduces a currency s purchasing power similarly loss of purchasing power has the same effect of an increase in prices to measure purchasing power in the traditional economic sense you could compare the price of a good or service against a price index such as the consumer price index cpi one way to understand purchasing power is to imagine that you worked the same job that your grandfather worked 40 years ago today you would need a much higher salary to maintain the same quality of living by the same token a homebuyer looking for homes 10 years ago in the 300 000 to 350 000 price range had more and better options to consider than people have now in the same price range 