One cannot measure inflation by taking a few products as examples. I bought a Garmin GPS recently that was half the price it was three years ago...I bought a Cabela’s electric fillet knife that usually sells for $29.99 for $9.99 and within two weeks of being off the sales price it went down to $16.99. But, again those are not adequate to talk about inflation or deflation alone. We can look at larger trends for that. The most recent Wholesale Price Index was down. That doesn’t happen in inflationary times...
But, to simplify the discussion. When we talk about inflation we are talking about supply and demand for money. If we grow money supply too much that is inflation.
Specific product price increases may have something to do with it’s own supply and demand forces...than with inflation/deflation. So, we use aggregate prices and money supply estimates to determine if we have inflation.
True statement, while some of the grocery items have gone up in price others have come down. We go through 10 gallons of milk a month (I ration it or the kids would use twice that) milk was nearly $4 last year, this year it is down to under $3. Our over all monthly grocery bill has gone up some, but the children have gotten older and eat more. I haven't seen an unusually high jump in prices.
Good explanation.