Inflation: Three Ways to Learn

Pick a path. You can always come back and try a different one.

Not sure which to pick?

If you've never thought about inflation before, start with The Grocery Store. It uses concrete examples and no jargon. Then take the quiz to see what stuck. Then run the full simulator to see how the pieces fit together.

🛒 The Grocery Store

What is inflation? It's just one thing: prices going up over time. Here's how it works, using your weekly grocery cart.

The three things that move grocery prices

💰 How much money everyone has — if everyone gets a raise but stores have the same amount of food, prices go up.
📦 How much food is on the shelves — if a drought wipes out crops, food gets more expensive.
🔮 What people expect prices to do — if everyone thinks prices will keep rising, stores raise them, and workers ask for higher wages.

Step 1 of 5

💡 What's happening

✓

Nice work

You've just learned the three biggest forces that move prices in a real economy. That's not a small thing — most people never put this together.

What you just learned

Inflation = prices going up over time. A little bit (about 2% a year) is normal and healthy. A lot is painful.
If everyone suddenly has more money, but stores have the same amount of stuff, the stuff gets more expensive. This is the most common cause of inflation.
If supply gets disrupted (think 2020 toilet paper or a bad farming year), prices spike even if nothing else changes.
What people expect matters. If shoppers expect prices to keep rising, they buy more now — which pushes prices up further. It can become a loop.

Ready for the next step?

Try the quiz to test what you learned, or jump into the full simulator with six dials and real economic scenarios.

For educational purposes only. This is a simplified model meant to build intuition. Real inflation depends on many more factors than the three shown here.

🧠 Inflation Knowledge Quiz

Ten questions about what inflation is, what causes it, and how the Federal Reserve fights it. Each answer comes with a plain-English explanation.

🧠 10 questions ⏱ ~5 min ★ Intermediate

Question 1 of 10

Ready to run the economy yourself?

The full simulator lets you adjust six dials and tackle four real-world scenarios — the 1970s, deflation, supply shocks, and free play.

For educational purposes only. This quiz is meant to build understanding of inflation concepts. It is not financial, investment, or economic advice.

🎛 Inflation Simulator

Inflation isn't magic — it's the result of specific forces pushing prices up or down. Adjust six dials and watch inflation react in real time. Then try four scenarios where you have to get inflation to a target.

🎛 6 dials 🎯 4 scenarios ⏱ ~10 min ★ Intermediate+

What you'll learn

How the Federal Reserve fights inflation by raising interest rates
Why money supply growth matters — and why it's not the whole story
How government spending pushes prices up or down
What "supply shocks" are (think oil prices, supply chains)
Why expectations can make inflation stick around

Scenario 1 of 4

Current Inflation Rate (CPI, annualized)

2.0%

-2%0%2% (Fed target)5%10%+

At the Fed's target. Stable prices.

📊 What's driving inflation right now

Baseline economy = 2%. Bars show each dial's push above or below that.

📖 What's happening

Policy & Economic Dials

Drag each slider. The gauge updates live.

Five things to remember

The Fed funds rate is the most direct tool the U.S. has to fight inflation. Raising it makes borrowing more expensive, which cools demand.
Money supply growth that outpaces real economic growth tends to show up as inflation eventually — though the timing is messy and depends on how fast money circulates.
Large fiscal deficits add to demand. When the economy is already running hot, that pushes prices up further.
Supply shocks can cause inflation without any policy mistake — but how the Fed responds determines whether it sticks.
Inflation expectations matter. If people expect prices to keep rising, they ask for higher wages and raise their own prices, which keeps inflation going.

For educational purposes only. This simulator uses a simplified model of the U.S. economy to illustrate how inflation responds to policy and supply-side forces. Real-world inflation depends on many additional factors and lagged effects not captured here. This is not investment, economic, or policy advice.