eli5: Since inflation pushes the price of items up every year, does that mean we’re eventually going to get to a point where it’s normal to pay like $20 for a carton of milk?

Question

eli5: Since inflation pushes the price of items up every year, does that mean we’re eventually going to get to a point where it’s normal to pay like $20 for a carton of milk?

In: Economics

Answer 1

Yes inflation can cause this. New efficiencies found in the system could cause the cost of milk to become cheaper however the changes would need to be very effective and rapid for us to see the value go down. Typically, supermarkets work very hard to keep staples like milk and bread low as customers often make their decisions on where to buy on those items. They make profit on other items.

There could also be a redenomination: the government could take a 0 of everything to make the numbers more reasonable. That is unlikely to happen though for a variety of reasons.