It's a product that, for many of you, stays by your side and is used countless times in a typical day.

Answer: Smartphones

Questions: 

• Do you think it makes sense to take quality into account when determining an inflation/deflation factor for a product? 
• Why do you think that the quality of phones continues to improve every year? 
• What are major improvements that you have noticed with recent smartphones? 

Here are the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (CNBC): 

But one product category monitored in the CPI recorded a 22% plunge, showing deflation: smartphones.

Here’s why: Normally, the CPI contains price comparisons for identical items, whose prices don’t change much from year to year. So, it might compare eggs with eggs, for example. But in the case of smartphones, the statistics bureau has to control for devices that get better each year. If smartphones are improving and the price is staying the same, then the bureau records a price decline.

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Looking for other NGPF resources with an inflation component? Here's what our SEARCH tool found. 

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Your students can learn about banking online with the new and improved NGPF Online Bank Simulator. Here's the activity that accompanies this interactive resource. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.