Term
Purchasing power
How much stuff a given amount of money can buy. Inflation erodes it; a raise only protects it if it beats inflation.
In pesos: $500 MXN that bought ten tacos-and-soda lunches five years ago may buy seven today.
Where to go deeper
3/4 5 min Read What inflation is, and how it hits you Why the same money buys less over time, how a raise can still be a pay cut, and what central banks are actually doing when they raise rates.More terms on the same topic
Educational content only: not financial, investment or tax advice. The numbers are examples to understand the idea, not a forecast or a recommendation.