A consumer's real purchasing power refers to

Question

the nominal income level of the consumer.


wage income earned through employment.


the maximum volume of goods and services that the consumer can buy.


nominal GDP per capita.


real GDP deflated by the price level.

Answer 1

A consumer's real purchasing power refers to the maximum volume of goods and services that the consumer can buy.

This concept emphasizes how much can be purchased with the consumer's income after accounting for the effects of inflation and price levels, reflecting the actual buying power in terms of goods and services rather than just monetary amounts.