Section 1

📖 Terminology

These are real terms you'll see in the news, on report cards from economists, and at your dinner table whenever inflation comes up. Tap any word to see what it actually means.

Inflation
Noun Tap
The general rise in prices over time. Or, looked at the other way: the dollar slowly losing buying power. A small steady amount is normal; a lot is a problem.
Balance Sheet
Noun Tap
A list of everything an organization owns and owes. When the Fed "expands its balance sheet," it's buying more assets — and the dollars used to pay for them flow into the economy.
CPI
Acronym Tap
Consumer Price Index — a monthly measurement of how much a typical "basket" of goods and services costs. When you hear "inflation was 3% last year," that number usually came from the CPI.
Cost-Push
Noun Phrase Tap
Inflation caused by the cost of making things going up — like when oil prices spike, supply chains break, or factories shut down. The cost gets pushed onto buyers.
Deflation
Noun Tap
The opposite of inflation — prices falling over time. Sounds nice, but when prices keep falling, people stop buying, businesses earn less, and workers lose jobs.
Demand-Pull
Noun Phrase Tap
Inflation caused by too many people trying to buy too few things. The "demand" pulls prices up.
Expectations
Noun Tap
What people believe will happen next. If everyone expects prices to rise, workers ask for raises, stores raise prices early, and inflation can become a self-fulfilling cycle.
Federal Reserve
Noun Phrase Tap
The central bank of the United States — often just called "the Fed." Its job is to keep the dollar stable and the job market healthy. It does this mainly by raising or lowering interest rates.
Fiscal Policy
Noun Phrase Tap
Decisions about government spending and taxes. Made by Congress and the President — not the Fed. Fiscal policy can fight inflation by reducing spending, raising taxes, or making targeted investments.
Hyperinflation
Noun Tap
Extremely fast, out-of-control inflation — typically 50% or more per month. Famous examples: Germany 1923, Hungary 1946. Currencies often collapse entirely when this happens.
Interest Rates
Noun Phrase Tap
The cost of borrowing money. When interest rates go up, mortgages, car loans, and credit cards get more expensive. The Fed raises rates to slow inflation.
Monetary Policy
Noun Phrase Tap
Actions taken by a central bank (like the Fed) to manage the economy — mostly by changing interest rates and adjusting the money supply. The Fed's main tool for fighting inflation.
Money Supply
Noun Phrase Tap
The total amount of money circulating in an economy. When the supply grows much faster than the amount of stuff being made, each dollar represents a smaller share of the economy.
Recession
Noun Tap
A period when the economy shrinks for several months in a row. Businesses slow down, people lose jobs, and spending drops. Recessions are part of the normal economic cycle.
Stagflation
Noun Tap
The painful combination of stagnant growth (high unemployment) plus high inflation. Economists used to think this couldn't happen — until the U.S. lived through it in the 1970s.
Stimulus
Noun Tap
Money the government puts into the economy to help during a tough time — like the checks sent to families during the COVID-19 pandemic.
Supply Chain
Noun Phrase Tap
The long path that products take from raw materials to your hands — factories, ships, trucks, warehouses, stores. When any link breaks, prices can rise sharply.
🍦 What's the Scoop on these words?

Every term above is something you'll hear in real news stories, real classroom debates, and real conversations about money. The more of these you can explain without looking, the better you'll understand what's actually happening when prices change — and the harder it gets for someone to tell you a too-simple story.

Section 2

Check-In Questions

These questions follow the chapters in order. Some are factual recall — make sure you understood the basics. Others ask you to think and explain. Type your answers below; they save automatically as you write.

Question 1Chapter 1
In your own words, what does it mean to say that "the dollar is shrinking"? Why is that a more accurate way to describe inflation than "prices are going up"?
Question 2Chapter 2
What does CPI stand for, and what does it measure?
Question 3Chapter 2
The Federal Reserve aims for about 2% inflation per year — not 0%. Why isn't zero inflation the goal?
Question 4Chapter 3
The book describes two opposite ways a country's money can fail. Name them and give one historical example of each.
Question 5Chapter 3
Paul Volcker raised interest rates to nearly 20% in 1981 to crush inflation. Some called him a hero, others called him reckless. Briefly explain why both views had evidence behind them.
Question 6Chapter 4
Match each driver of inflation to its short description:
a. Demand-pull — type letter:
b. Cost-push — type letter:
c. Money supply — type letter:
d. Expectations — type letter:
1. The cost of making things rises and gets passed to buyers.
2. Too many dollars enter the economy without more goods being made.
3. Too many buyers chase too few products.
4. People think prices will rise, so they act in ways that make it happen.
Question 7Chapter 4
A pizza shop buys cheese for $4 per pizza. Cheese prices double overnight. The shop chooses to raise the pizza price from $15 to $19 instead of $20. What happened to the shop's profit, and why might they not pass on the full $4 increase?
Question 8Chapter 4
List three "policy-driven costs" the book mentions in cost-push inflation. (These are costs governments choose, like taxes or regulations.)
Question 9Chapter 5
Ellie and Donnie disagree about why inflation hit hard in 2021–2023. Each one points to real things that actually happened. Without saying which one is right, write one sentence summarizing each of their views.
Question 10Chapter 6
Inflation can be helpful or harmful depending on who you are. Give one example of someone who is helped by mild inflation and one example of someone who is hurt by it.
Question 11Chapter 7
The book describes two main approaches to slowing inflation. Name them, and write one tradeoff for each.
Question 12Chapter 8
Big-picture question: The book says most disagreements about inflation aren't about facts — they're about people weighing the same facts differently. In your own words, what does that mean, and why is it important to remember when reading the news?
Section 3

Activities

Time to get hands-on. These four activities help you do what you learned, not just remember it.

1
The Shrinking Dollar Calculator
10 min

Pick something your grandparents or older relatives might have bought when they were your age — a candy bar, a movie ticket, a comic book. Find out (ask them, or look online) what it cost back then. Then enter the numbers below to see how much that same item should "feel like" today, using inflation math.

3.2% is roughly the U.S. average since 1913.
In 2026 dollars, that item should cost about
— enter values above —

After you calculate, ask: how does the answer compare to what the item actually costs today? If they're different, why might that be?

2
Spot the Driver
15 min

Each of these is a real headline-style scenario. Identify which inflation driver (or drivers) is at work: demand-pull, cost-push, money supply, or expectations. More than one answer can be correct — explain your thinking.

Scenario A: A massive drought wipes out half the U.S. corn harvest. Prices for cereal, soda, and meat (which uses corn for animal feed) rise sharply over the next year.
Scenario B: The government sends every household a $2,000 check during a crisis. Within months, used cars, electronics, and home renovations all become much more expensive.
Scenario C: News reports keep saying "inflation will get worse next year." Local restaurants raise their menu prices early just to get ahead of expected cost increases.
Scenario D: A new tariff adds 25% to the cost of imported steel. Within a year, U.S. cars, washing machines, and construction projects cost more.
3
Helped or Hurt?
10 min

For each person below, decide whether mild inflation would generally help them or hurt them — and write why in one sentence.

The People

  • A retiree on a fixed monthly pension that doesn't rise with prices.
  • A homeowner with a 30-year mortgage at a fixed payment.
  • A teen saving allowance money in a piggy bank for three years.
  • The federal government, which owes a lot of money in fixed-dollar debt.

More People

  • A worker whose paycheck rises slower than prices do.
  • A small business owner whose costs and prices are both rising.
  • A college student with $30,000 in fixed-rate student loans.
  • A family that spends most of their income on groceries and gas.
4
You're the President
20 min

Inflation has just hit 6% — three times the Fed's target. You're the President. Below are five tools you could use. Pick three. Write down which ones, in what order, and why. There is no "right answer" — but every choice has tradeoffs you should explain.

Tool 1: Encourage the Federal Reserve to raise interest rates aggressively (Volcker-style).
Tool 2: Cut government spending to reduce the amount of money in the economy.
Tool 3: Invest in fixing supply chains — ports, factories, shipping, semiconductors.
Tool 4: Lower tariffs on imported goods to bring down prices.
Tool 5: Send targeted help to families hit hardest, while letting prices stabilize on their own.

Your three picks (and order):

What's the biggest tradeoff or risk in your plan?

Section 4

Progress Tracker

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Section 5 · The Capstone

What's the Scoop?

This is the most important page in the workbook. Take your time.

🍦
What's the Scoop?

Now that you've finished Hey, Who Shrunk My Dollar?, write your answer in your own words. Don't just summarize the book — say what you think.

What's the scoop on inflation?

Some prompts to help you, if you want them: What is inflation, really? What surprised you most about it? Did the book change your mind about anything? If a younger sibling asked you to explain it, what would you say?

There's no right answer here. The smartest readers are the ones who can hold the whole picture and weigh it honestly.

Section 6 · Test Yourself

The Inflation Quiz

Ten questions. Each one has one best answer based on the book.

Pick your answer for each, then click Score My Quiz at the bottom. You'll see what you got right, what you missed, and a quick explanation for each one.

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Your Score