The Money PagesWhat Can $10 Buy Now?
When a snack goes from $2 to $2.50, the same money buys fewer snacks.
In a made-up shop, snacks cost $2 each. Your $10 buys five snacks.
Later, the same snacks cost $2.50 each. Now $10 buys four.
You still have $10. It just buys fewer snacks.
That's purchasing power: how much your money can buy.
One snack price doesn't prove inflation. Inflation is a rise in prices across many goods and services over time.
When lots of prices rise but the money available stays the same, plans may need to change. People may also need help. It isn't a problem that better counting can fix.
Money words
Purchasing power
How much your money can buy.
Purchasing power means what money can buy. At $2.50 each, $10 buys four snacks, not five.
