In 2000, a movie ticket to GooglePlex Theatres cost $10. In 2020, a movie ticket cost $15.
a) Based only on that information, should that count as inflation? Why or why not?
b) Suppose that between 2000 and 2020, the theatre installed a new, state-of-the-art surround sound system and upgraded its seats. Does that change your answer above?
c) In simple terms, what does ‘inflation’ actually mean?
d) Now think about inflation and the cost of UT tuition over the last 20 or 30 years. UTK Tuition has certainly increased faster than the overall increase in the price level. Technically, is this ‘inflation’?