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- Examples of purchasing power include12345:
- Labor contracts tying wage adjustments to changes in the Consumer Price Index (CPI).
- The ability to buy more goods with the same amount of money due to deflation or technological innovation.
- The number of items you can purchase with a specific amount of money.
- Income increase allowing for the purchase of more goods.
- Margin account requirements affecting an investor's ability to purchase shares.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.Contracts and other obligations involving payments over time often consider purchasing power. For example, many labor contracts tie wage adjustments to changes in the CPI, as do some alimony, child support, rent, royalty, and other obligations affected by changes in purchasing power.investinganswers.com/dictionary/p/purchasing-powerCauses of purchasing power gain include deflation and technological innovation. One example of purchasing power gain would be if laptop computers that cost $1,000 two years ago cost $500 today. In the absence of inflation, $1,000 will now buy a laptop plus an additional $500 worth of goods.www.investopedia.com/terms/p/purchasingpower.aspFor example, if you walk into the grocery store, how many things could you buy for 20 bucks? Can you buy four packs of diet Coke or only two? That’s your purchasing power right there.www.ramseysolutions.com/budgeting/purchasing-p…Example Let’s consider an example to illustrate the concept of purchasing power. Suppose that last year, Lucy earned $50,000 and the price of a loaf of bread was $2. With her income, Lucy was able to buy 25,000 loaves of bread ($50,000 / $2). Now, fast forward to this year. Lucy’s income has increased to $60,000 due to a raise at work.quickonomics.com/terms/purchasing-power/You can refine your understanding of purchasing power by considering this example: An investor has ₹10,00,000 in a margin account. They want to purchase shares of a new environmental engineering firm they believe has a lot of potential for success in the future. The broker they want to use wants 50% of the initial margin to complete a trade.in.indeed.com/career-advice/career-development/b… - People also ask
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