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 is the Partnerships and Adoption Manager for Next Gen Personal Finance’s midwest region. He brings his experience as a former teacher, curriculum designer, and sales and marketing professional to state organizations and school districts in supporting the implementation of their personal financial education efforts. He graduated from the University of Wisconsin-Green Bay and earned his teaching credential from Saint Mary’s University in Winona, Minnesota. He proudly taught at two rural high schools in Wisconsin before transitioning to curriculum design at NGPF, and is now excited to be on the front lines in delivering the best possible financial education in the midwest. He and his wife have three beautiful daughters, each of which inspire him to share the impact of being sound financial stewards both at home and as lifelong learners.