Purchasing power
How much a dollar can buy. Inflation lowers it.
Also called: buying power
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Related words
- Inflation
- When prices rise across the economy, so each dollar buys a little less.
- Federal Reserve
- The U.S. central bank, often called the Fed. It raises or lowers a key interest rate to keep prices stable and jobs plentiful.
- Interest rate
- Interest shown as a percent of the amount borrowed or saved, usually per year.
- Yield
- The yearly return an investment pays, shown as a percent. For bonds, yields go up when prices go down.
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