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4-25-2011 @ 4:29PM
Raven, let's try a thought experiment, and we'll use fictional numbers for simplicity.Lets say it's the year 2000. A gallon of milk costs 1 dollar. (Hypothetical here people, bear with me.)Over the course of the year 2000, economic inflation is 10%. At the end of the year, milk costs $1.10.So now that gallon of milk at the beginning of 2001 is $1.10. Still with me?Now, let's suppose that in 2001, economic inflation was also 10%. At the end of 2001, that same gallon of milk is $1.21.You are therefore paying more for that gallon of milk due to inflation. The inflation is still there, the difference is the RATE of inflation is the same.And if you are still confused by that thought experiment, I suggest you search inflation on wikipedia. It is pretty good at describing it.
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