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

Not necessarily. Countries strike zeroes from their currencies every now and then. This is the norm in case of hyperinflation. In the past there was the Weimar Republic, Turkey, Brazil. A more recent example is Venezuela. In these cases absolutely all the amounts, get divided by 1,000, 10,000. 100,000, or a multiple of 10. A product that has the price of $10,000 becomes $10, but your $10,000 also becomes $10. So, you still pay the same, until the price goes up again. But this makes life easier to all involved for a while.