A decrease in the dollar's purchasing power is referred to as what?

A decrease in the dollar's purchasing power is referred to as inflation. When inflation occurs, the prices of goods and services rise, which means that each dollar buys less than it did before. This can be caused by an increase in the supply of money in the economy, rising demand for goods and services, or other economic factors that affect price levels.

In contrast, deflation represents a decrease in overall price levels, which can lead to an increase in the purchasing power of the dollar. Stagnation refers to a period of slow economic growth, and depreciation specifically pertains to the decline in value of a currency relative to another currency. Thus, inflation is the term that accurately describes the decrease in purchasing power of the dollar.