The reason that prices keep going up is due to inflation. Generally, inflation is about 2% a year, but sometimes it is higher. Even at 2% per year, this can still add up over the long term (prices will double about every 35 years). This is why things are more expensive now, especially compared to the 1800s.
Inflation is generally occurring at all times during normal moments of the economy, sometimes more than other times. If you had $100 invested in McDonald's stock, the main purpose of investing that money is to hope you gain more on that $100 than what happens with the cost of things, or inflation. For example, say McDonald's goes up 10% and inflation is 3% per year, this means that your McDonald's investment would be worth $110 and something that cost $100 one year ago now costs $103. This gives you a net return of $7 on your money, making you earn more than inflation, which should be your goal with investing as you want to make money over time, beating the rising cost of living.
Money Smart Kid