Interest is the name of the price that borrowers need to pay lenders for transferring purchasing power to the future.
The amount of money that consumers can spend on goods or services is known as their purchasing power. Consumer purchasing power, which is linked to the Consumer Price Index or Cost of Living Index as it is often known in the United States, shows how much inflation has an impact on consumers' ability to make purchases.
Since real income is defined as income that has been adjusted for inflation, a greater real income translates to a better purchasing power. The purchasing power of money has historically been largely influenced by the local value of gold and silver, but it has also been made sensitive to the supply and demand of certain items on the market.
Learn more about purchasing power here
https://brainly.com/question/16467725
#SPJ4
