Baskets, Base Years, and Bias: Constructing and Using a Student Price Index

In this activity, students will simulate how changes in the money supply in their classroom economy affect the price of a market basket of goods auctioned in their classroom. Students will then construct a price index using a simplified basket of teen-friendly goods and services. Using their market basket values, students will calculate a student price index and an inflation rate. Students will prepare a short paper or presentation analyzing the validity of using their Student Price Index as a measure of inflation.

Lesson Components