Why do prices go up over time?
Show answer & explanation
Answer: Money supply increases
Money supply increases ✓ — Correct! When governments print more money, each dollar becomes less valuable. More money chasing the same goods pushes prices up—that's inflation. A bit of inflation is normal and healthy, but too much means your savings buy less over time. That's why $1 today buys less than in 1950!
Products get better quality — Wrong. While quality improvements can affect some prices, this doesn't explain the general upward trend of all prices over time, including basic commodities.
Demand always rises — Wrong. Demand fluctuates for different products and doesn't always rise. The consistent upward pressure on all prices comes from the increasing money supply reducing each dollar's value.