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4 votes
4 votes
Each month you spend $500 buying coffee. If the price of coffee increases from $2 to $3, what happens to your purchasing power?.

User Georges
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2.6k points

2 Answers

20 votes
20 votes

Answer:

it decreases

Step-by-step explanation:

it decreases because you won't be able to afford the amount that $500 can buy

User Nelstaar
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3.1k points
15 votes
15 votes

Answer:

The purchasing power decreases.

Step-by-step explanation:

Consumer purchasing power is determined by the Consumer Price Index, which surveys changes in the prices of goods and services over a period of months or years.

What is high purchasing power?

A higher real income means a higher purchasing power since real income refers to the income adjusted for inflation. Traditionally, the purchasing power of money depended heavily upon the local value of gold and silver, but was also made subject to the availability and demand of certain goods on the market.

How can we increase purchasing power?

Provide Value to Your Vendors. Retailers typically set their prices according to the gross margin made on every sale

Consolidate Purchase Orders.

Open New Markets.

The Power of Many.

User Corrina
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2.9k points