# Inflation

Discussion in 'Economy' started by CrusaderFrank, Oct 19, 2012.

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Is it inflationary when \$10 that bought a pound of coffee 3 years ago now only buys 12 ounces?

Is it inflationary when a \$4/box of cereal is now 30% smaller that when it was 3 years ago?

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### AquaAthenaINTJ/ENTJ

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Yes, our dollar has been shrinking for a long while, now....

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### pinqyGold Member

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Yes. The CPI takes that into account when calculating inflation. Your coffee example would show an increase of 33% and your cereal example would show an increase of 42.9%

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### OddballBANNEDSupporting Member

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Silver @ \$7.00 in '05 now going in excess of \$33.00.

But inflation is being held in check!

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I didn't see where it adjusted for produce size. It looked like it just counted what a consumer spends for a product and not how much of the product they were buying

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### pinqyGold Member

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It doesn't actually do either. Weights are set every two years based on data from the Consumer Expenditure Survey. Weights are determined by price times quantity for items as a percent of total consumption spending.

When the actual prices are collected and aggregated, the analyst is simply looking for price changes, and the price change would be from the price by pound or price by ounce etc. You have to have a common basis of comparison. It wouldn't make any sense when aggregating to call a 6 oz can and a 20 oz can each as "1 can." Same with items of variable size. "1 steak" or "1 chicken" are not meaningful measures because the price actually depends on the weight.

Quality change is also considered. If cheaper material is used with no price change, that would show as a price increase, if better material is used with no price change that would be a price decrease etc. If previously optional items on a car become standard, the price change of the car takes that into account as well.

Last edited: Oct 19, 2012
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### OddballBANNEDSupporting Member

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### EdwardBaiamontePlatinum Member

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yes, there is obviously inflation. It is liberal policy because they would be thrown out of office en masse if they taxed us openly. The inflation tax should be illegal in a democracy where most people are too ignorant to know they are paying the liberal inflation tax.

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### pinqyGold Member

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This should be good...How do you propose preventing sellers from raising prices?

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### EdwardBaiamontePlatinum Member

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actually, inflation occurs when the liberals print too much money, not when sellers raise prices.

Sellers cant raise prices if there is not more money with which to pay the higher prices.

Make sense???? Of course not , a liberal is a liberal becuase he lacks the IQ to understand. It is a sad fact.

Last edited: Oct 19, 2012

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