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    Effects of Contemporary Issues

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    edrelene
    Purchasing power is affected by factors like price increases, exchange rate fluctuations, migration, unemployment, and peace and order issues. Exchange rates impact national policies and trade. Higher oil prices can decrease purchasing power. Peace and order enable growth, jobs, and tourism.

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    Effects of Contemporary Issues

    Uploaded by

    edrelene
    24 views31 pages
    Purchasing power is affected by factors like price increases, exchange rate fluctuations, migration, unemployment, and peace and order issues. Exchange rates impact national policies and trade. Higher oil prices can decrease purchasing power. Peace and order enable growth, jobs, and tourism.

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    applied economics 12

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    Purchasing power is affected by factors like price increases, exchange rate fluctuations, migration, unemployment, and peace and order issues. Exchange rates impact national policies and trade. Higher oil prices can decrease purchasing power. Peace and order enable growth, jobs, and tourism.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    24 views31 pages

    Effects of Contemporary Issues

    Uploaded by

    edrelene
    Purchasing power is affected by factors like price increases, exchange rate fluctuations, migration, unemployment, and peace and order issues. Exchange rates impact national policies and trade. Higher oil prices can decrease purchasing power. Peace and order enable growth, jobs, and tourism.

    Copyright:

    © All Rights Reserved
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    You are on page 1of 31

    PURCHASING POWER

    Is the equivalent rate of a


    currency expressed in terms
    of the value of goods or
    services that a unit of
    money can buy.
    PURCHASING POWER
    Price increases reduce the
    purchasing power of money
    that in turn has an adverse
    impact on consumers'
    welfare.
    REMEMBER:
     Purchasing power of people is
    always affected in a community
    with a contemporary issue such
    as migration, unemployment,
    fluctuation in the exchange
    rate, peace and order, etc.
    What are the causes of migration?
    1.Poverty
    2.Unemployment
    3.Improve standard of living
    4.Higher Salary
    5.Economic Security
    Fluctuations In Exchange Rate
    The value of the exchange rate is
    important in creating national
    policies especially in open
    economies. It is also important in
    guiding the exporting and
    exporting of a country.
    Fluctuations In Exchange Rate
    For example, the Philippine peso (PHP)
    in a United States dollar (USD) in 2018
    was almost P53.1424 per $ 1. The peso
    rate of a Japanese yen (JPY) in 2018 was
    almost P0.46787 per ¥ 1. The pesos rate
    of Thailand (baht) in 2018 was almost
    1.6259 per TBH.
    Fluctuations In Exchange Rate
    Under the fixed exchange rate, the exchange rate
    may also decrease. This event is called a
    devaluation where the local currency amount of
    currency is decreasing in other countries. This is
    contrary to revaluation where the value of local
    currency in other countries is increasing. In these
    cases, there may be devaluation or revaluation
    only if the government announces it.
    Fluctuations In Exchange Rate
    Greater prices lead to a diminishing in the
    purchasing power of a dollar. As a result,
    buyers often adjust their purchasing behavior
    and spend less of their disposable income.
    This effect of decreased purchasing power
    lead to a decrease in overall consumer
    spending around the country.
    Oil Price Increases
    During big-time oil price increases in the country, you
    can hear everyone complaining about how harder it
    will be to make ends meet. Some will go to the extent
    of politicizing the price increase just to be able to
    throw some blames to the President. It’s more than a
    peso increase per liter. People are complaining
    because whenever there is an increase in gasoline
    there is a tendency of decreasing purchasing power
    and spend less on the disposal of income.
    Peace and Order
    Through the help of the
    executive orders of the
    government, it helps in
    maintaining social order,
    political stability.
    Peace and Order
    A condition of peace and order enables the
    growth of funds, generates more
    employment opportunities and attracts more
    tourists. Peace is the absence of aggression
    and is characterized by healthy social and
    international connections, fairness and
    parity.

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