For better or for worse, inflation is here to stay. This game lets you practice your decision making centered around the rise and fall of prices and interest rates.

Inflation stinks--nobody likes paying more for the goods and services they buy. But since interest rates are the tool most commonly used by the Federal Reserve to bring inflation down, that means it's possible to mitigate the damage of inflation by choosing what to do with your finances based on their rise and fall. This interactive game from Marginal Revolution University will test students' ability to make financial decisions based on inflation predictions. How inflation will change is not always this easy to predict, but it can be good practice for students to understand what financial vehicles are best during periods of high and low inflation.

Questions:

• How does inflation impact your purchasing power? Give an example to illustrate your point.
• Why might someone choose a 2% automatic raise over a raise that matches the inflation rate? Conversely, why might someone choose the inflation-matching raise?
• How does your risk tolerance affect your decision between a fixed raise and an inflation-based raise?
• How confident do you feel in predicting future inflation rates? What factors might influence your prediction accuracy?
• How can understanding inflation help you in long-term financial planning, such as saving for retirement or purchasing a home?

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Be sure to check out NGPF's Behavioral Economics unit for lessons, activities, and more!

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Looking for more interactive resources? Be sure to check out the NGPF Interactive Library. 

About the Author

Ryan Wood

Ryan grew up with and maintains a love for learning. He graduated from the University of Wisconsin-Green Bay with a degree in Business Administration and worked in sports marketing for a number of years. After living in Texas, Colorado, Tennessee, and Minnesota, the call of education eventually brought Ryan back to his home state of Wisconsin where he was a Business and Marketing teacher for three years. In his free time he likes to spend time with his wife and daughter, play basketball, read, and go fishing. Now with NGPF, Ryan is excited to help teachers lead the most important course their students will ever take.