purchasing power

Examples of purchasing power in the following topics:

• Consumer Income, Purchasing Power, and Confidence

  • A consumer's buying power represents his or her ability to make purchases.
  • Purchasing power is the amount of goods or services that can be purchased with a unit of currency.
  • If one's monetary income stays the same, but the price level increases, the purchasing power of that income falls.
  • A higher real income means a higher purchasing power since real income refers to the income adjusted for inflation.
  • Illustrate the relationship between consumer purchasing power, pricing and the economy

• The Costs of Inflation

  • The costs of inflation include menu costs, shoe leather costs, loss of purchasing power, and the redistribution of wealth.
  • Each dollar has less purchasing power with inflation.
  • Purchasing power can be maintained if wages increase exactly at the rate of inflation, but this is not always the case.
  • When wages increase less than the rate of inflation, people lose purchasing power.
  • When prices are rising quickly, people will buy durable and nonperishable goods quickly as a store of wealth, to avoid the losses expected from the declining purchasing power of money.

• Introduction to IFRS

  • Current Cost Accounting, under Physical Capital Maintenance at all levels of inflation and deflation under the Historical Cost paradigm as well as the Capital Maintenance in Units of Constant Purchasing Power paradigm
  • Financial capital maintenance in units of constant purchasing power, i.e., Constant Item Purchasing Power Accounting – CIPPA – in terms of a Daily Consumer Price Index or daily rate at all levels of inflation and deflation under the Capital Maintenance in Units of Constant Purchasing Power paradigm and Constant Purchasing Power Accounting – CPPA – during hyperinflation under the Historical Cost paradigm.
  • Going concern: for the foreseeable future an entity will continue under the Historical Cost paradigm as well as under the Capital Maintenance in Units of Constant Purchasing Power paradigm
  • Units of constant purchasing power: capital maintenance in units of constant purchasing power at all levels of inflation and deflation in terms of a Daily Consumer Price Index or daily rate only under the Capital Maintenance in Units of Constant Purchasing Power paradigm.

• Real Versus Nominal Rates

  • The real exchange rate is the purchasing power of a currency relative to another at current exchange rates and prices.
  • A measure of the differences in price levels is Purchasing Power Parity (PPP) .
  • The concept of purchasing power parity allows one to estimate what the exchange rate between two currencies would have to be in order for the exchange to be on par with the purchasing power of the two countries' currencies.
  • Using the PPP rate for hypothetical currency conversions, a given amount of one currency has the same purchasing power whether used directly to purchase a market basket of goods or used to convert at the PPP rate to the other currency and then purchase the market basket using that currency.
  • Purchasing Power Parity evaluates and compares the prices of goods in different countries, such as groceries.

• Growth in the Rest of the World

  • The purchasing power expanded for 145 markets and contracted for two.
  • The purchasing power increased for 148 markets and contracted for three.
  • The purchasing power increased for 180 markets.
  • The purchasing power contracted for 79 markets.
  • The purchasing power increased for 169 markets and contracted for 14.

• Inherent Powers

  • Inherent powers are assumed powers of the president not specifically listed in the Constitution.
  • Inherent powers are those powers that a sovereign state holds.
  • In other words, Inherent powers are assumed powers of the president not specifically listed in the Constitution.
  • He used the inherent powers to justify the Louisiana Purchase in 1803 which dramatically increased the size of our nation.
  • The Louisiana Purchase of 1803 increased the geographical size of the United States significantly.

• Wind power

  • Whether for sailing or rolling a grindstone in a flourmill, wind power has been around for centuries.
  • Size-wise, wind turbines can range from huge multi-megawatt, 11-storey towers (which power thousands of homes), to modest 1 megawatt turbines that can power 350 homes, or smaller 1–10 kilowatt roof-mounted turbines which are purchased from specialized retailers and can power a house or business.
  • Is wind power affordable?
  • Is wind power practical?
  • Most users of wind power seem to agree that the benefits outweigh the disadvantages.

• Family

  • Many factors influence purchasing.
  • Often, the decision maker changes based on the type of purchase or the size of the purchase.
  • Families influence purchases in many ways.
  • Interaction between spouses and the number and ages of children play a particularly powerful role on buying behaviors.
  • These family influences affect how consumers look at purchases more directly than most other social influences on consumer purchasing.

• Reference Groups

  • Reference groups are groups that consumers will look to for help in making purchasing decisions.
  • Reference groups are considered a social influence in consumer purchasing.
  • They are often groups that consumers will look to to make purchasing decisions.
  • Reference groups can and do have a tremendous influence on purchasing decisions.
  • The friends we have are often one of the most powerful reference groups in influencing our consumer behavior.

• Putting together a clean production line

  • To help avoid these pitfalls, the following questions should be asked before purchasing any piece of machinery or equipment: (Scott, Jonathan T., Managing the New Frontiers)
  • Is the full life-cycle cost of the machine being considered rather than its purchase price?
  • Inefficient, energy-hungry machines can consume their initial purchasing cost in energy per week.
  • The first reveals the machine's purchase cost.
  • For example, in 1897, Sakichi Toyoda innovated his company's power-driven weaving looms with a unique device that automatically shut the machines off when a thread broke, thereby preventing the wasting of good thread and the making of defective cloth.