Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
GAMEY Project: Gamified Approach to Money Education for Youth
MODULE 2: Understanding the Economy
Let's go!
Understanding the Economy
Rob is a young learner navigating today’s financial landscape. In this module, you’ll explore how big economic forces, like inflation, interest rates, and public policy, impact your everyday decisions.
Continue
Table of content
- Module’s goals
- What will you learn
- Let’s Break It Down: The Economy
- How Inflation Shrinks Your Money
- Borrowing for the Future
- How Policy Shapes Your Wallet
- How the World Affects Your Finances
- Knowledge Check
- Glossary
Continue
Module Goal
- Understand the fundamentals of macroeconomic concepts.
- Explore how inflation affects purchasing power.
- Examine the impact of interest rates and student loans.
- Understand the influence of government policy and globalization on personal finance.
Continue
What will you learn?
By the end of this module, you will be able to:
- Define inflation, GDP, and interest rates
- Evaluate how inflation impacts your budget
- Analyze student loan interest
- Explain fiscal and monetary policy
- Interpret how global economies affect local jobs
Continue
Let’s Break It Down The Economy
Continue
Key terms to understand the economy
Represents the total value of all goods and services produced in a country. Example: If a country’s GDP is growing, it often means businesses are producing more, jobs are more available, and wages may rise.
The cost of borrowing money or the return you get from saving. Example: When interest rates are high, borrowing is more expensive, so think twice before taking a student loan or car loan.
Shows the percentage of people actively seeking jobs but unable to find one. Example: A high unemployment rate usually signals a struggling economy.
Refers to the general rise in prices over time. Example: If a carton of milk cost €1.00 five years ago and now costs €1.30, that’s inflation in action.
Gross Domestic Product (GDP)
Inflation
Unemployment Rate
Interest Rate
Continue
Economic Indicators You Should Actually Watch
It sets the legal floor for your earnings. Even if you freelance or work informally, the minimum wage shapes what’s considered “fair pay.” Learn what the minimum wage is in your country and whether it’s keeping up with inflation.
Tells you how much the cost of living is rising. If inflation is high and your income isn’t, you can afford less. Check it on: your country’s national statistics office or ec.europa.eu
Shows how hard it is for young people to find work, especially students, recent graduates, or part-timers. Affects job availability, wage pressure, and career planning.
Inflation Rate (% change in prices)
Youth Unemployment Rate (% of youth without jobs)
Minimum Wage (€/hour)
Continue
How Inflation Shrinks Your Money
Continue
Inflation and Purchasing Power
Inflation reduces your purchasing power, meaning your money buys less than it used to. This impacts everything from groceries to rent and travel. If your salary stays the same while prices rise, your lifestyle becomes more expensive. Inflation can also eat into your savings unless they grow faster than prices.
Continue
Let’s see what €100 could buy over the years:
2010
2020
2030
2015
2025
Full Grocery Cart
60 liters of fuel
A pair of shoes
10 coffees
A cinema ticket
Continue
Borrowing for the Future
Continue
Smart Borrowing Tips
✔ Borrow only what you need ✔ Understand your repayment schedule ✔ Compare lenders and interest rates ✔ Know your rights (grace periods, forgiveness, deferment) Borrowing isn’t bad..unplanned borrowing is.
Continue
Rob wants to study abroad and has four options:
Option 1
Option 3
Option 2
Option 4
Continue
Option 1: Government Loan (Fixed Interest)
Safe and predictable payments Interest stays the same regardless of the economy Lower risk, but sometimes slower approval
Restart
Option 2: Private Loan (Variable Interest)
Might start with a lower interest rate Risk: payments can rise if market rates increase Less predictable = potential budget pressure
Restart
Option 3: Work Part-Time + Borrow Less
Rob earns money while studying Reduces loan amount and total interest Might affect study time and grades
Restart
Option 4: Scholarship (competitive and limited)
Covers part or all tuition costs No repayment required Highly competitive, limited spots, and strict application rules
Restart
How Policy Shapes Your Wallet
Continue
The Role of Government in the Economy
Governments play a big role in the economy by using two types of tools: - Fiscal Policy: managing taxes and spending
- Monetary Policy: controlling interest rates and the money supply
These tools help guide the economy through good times and bad, and they affect YOU more than you might think, from student loans to job opportunities and tax deductions.
Continue
Correct concepts
Solution
Drag each policy tool into the correct category
Increase government spending
Fiscal Policy
Monetary Policy
Cut income tax rates
Raise interest rates
Buy government bonds from banks
Introduce new public infrastructure projects
Reduce money supply by selling bonds
Continue
How the World Affects Your Finances
Continue
Think global, act local
We live in a global economy. Events in one country often ripple across the world, including your finances.
Continue
Interactive World map
Exchange rate changes affect your ability to travel or order products online. Job markets may also shift due to outsourcing or foreign investment.
As part of the EU, Germany’s economic decisions impact interest rates and inflation across the Union.
If a major U.S. tech company cuts jobs, it can affect European suppliers — including Rob’s internship opportunities.
A slowdown in Chinese manufacturing can raise global prices due to fewer available goods — your electronics become more expensive.
Continue
Knowledge Check
Continue
Continue
Continue
Continue
Continue
Continue
Glossary
The total value of all goods and services a country produces.Why it matters: A growing GDP often means more jobs and higher wages; a shrinking GDP = tougher times.
The cost of borrowing money or the reward for saving it.Why it matters: It affects how much you repay on student loans and how much your savings grow.
The general rise in prices over time.Why it matters: If your income doesn’t rise as fast as prices, you can afford less, your purchasing power decreases.
Interest Rate
GDP (Gross Domestic Product)
Title
Title
Title
Use this side to give more information about a topic.
Use this side to give more information about a topic.
Use this side to give more information about a topic.
Inflation
Subtitle
Subtitle
Subtitle
Government decisions on spending and taxation.Why it matters: Influences public services, taxes, and student aid. All things that affect your life directly.
The way local and international economies are connected.Why it matters: It affects job markets, prices, and the availability of goods and services in your country.
Title
Title
Use this side to give more information about a topic.
Use this side to give more information about a topic.
Globalization
Fiscal Policy
Subtitle
Subtitle
Continue
Resources
- Lusardi, A. & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy. Journal of Economic Literature, 52(1)
- Xiao, J. J. (2016). A Theoretical Framework for Financial Literacy and Financial Education. International Journal of Consumer Studies
- OECD (2018). G20/OECD INFE Policy Guidance on Financial Education in the Digital Age
🔗 Optional Resources:
- Investopedia – Economic Basics
- OECD – Financial Education for Youth
Continue
Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
Thank you!
Start
Fiscal Policy
Increase government spending Cut income tax rates Introduce new public infrastructure projects
Monetary Policy
Raise interest rates Buy government bonds from banks Reduce money supply by selling bonds
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Transcript
Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
GAMEY Project: Gamified Approach to Money Education for Youth
MODULE 2: Understanding the Economy
Let's go!
Understanding the Economy
Rob is a young learner navigating today’s financial landscape. In this module, you’ll explore how big economic forces, like inflation, interest rates, and public policy, impact your everyday decisions.
Continue
Table of content
Continue
Module Goal
Continue
What will you learn?
By the end of this module, you will be able to:
Continue
Let’s Break It Down The Economy
Continue
Key terms to understand the economy
Represents the total value of all goods and services produced in a country. Example: If a country’s GDP is growing, it often means businesses are producing more, jobs are more available, and wages may rise.
The cost of borrowing money or the return you get from saving. Example: When interest rates are high, borrowing is more expensive, so think twice before taking a student loan or car loan.
Shows the percentage of people actively seeking jobs but unable to find one. Example: A high unemployment rate usually signals a struggling economy.
Refers to the general rise in prices over time. Example: If a carton of milk cost €1.00 five years ago and now costs €1.30, that’s inflation in action.
Gross Domestic Product (GDP)
Inflation
Unemployment Rate
Interest Rate
Continue
Economic Indicators You Should Actually Watch
It sets the legal floor for your earnings. Even if you freelance or work informally, the minimum wage shapes what’s considered “fair pay.” Learn what the minimum wage is in your country and whether it’s keeping up with inflation.
Tells you how much the cost of living is rising. If inflation is high and your income isn’t, you can afford less. Check it on: your country’s national statistics office or ec.europa.eu
Shows how hard it is for young people to find work, especially students, recent graduates, or part-timers. Affects job availability, wage pressure, and career planning.
Inflation Rate (% change in prices)
Youth Unemployment Rate (% of youth without jobs)
Minimum Wage (€/hour)
Continue
How Inflation Shrinks Your Money
Continue
Inflation and Purchasing Power
Inflation reduces your purchasing power, meaning your money buys less than it used to. This impacts everything from groceries to rent and travel. If your salary stays the same while prices rise, your lifestyle becomes more expensive. Inflation can also eat into your savings unless they grow faster than prices.
Continue
Let’s see what €100 could buy over the years:
2010
2020
2030
2015
2025
Full Grocery Cart
60 liters of fuel
A pair of shoes
10 coffees
A cinema ticket
Continue
Borrowing for the Future
Continue
Smart Borrowing Tips
✔ Borrow only what you need ✔ Understand your repayment schedule ✔ Compare lenders and interest rates ✔ Know your rights (grace periods, forgiveness, deferment) Borrowing isn’t bad..unplanned borrowing is.
Continue
Rob wants to study abroad and has four options:
Option 1
Option 3
Option 2
Option 4
Continue
Option 1: Government Loan (Fixed Interest)
Safe and predictable payments Interest stays the same regardless of the economy Lower risk, but sometimes slower approval
Restart
Option 2: Private Loan (Variable Interest)
Might start with a lower interest rate Risk: payments can rise if market rates increase Less predictable = potential budget pressure
Restart
Option 3: Work Part-Time + Borrow Less
Rob earns money while studying Reduces loan amount and total interest Might affect study time and grades
Restart
Option 4: Scholarship (competitive and limited)
Covers part or all tuition costs No repayment required Highly competitive, limited spots, and strict application rules
Restart
How Policy Shapes Your Wallet
Continue
The Role of Government in the Economy
Governments play a big role in the economy by using two types of tools:
- Fiscal Policy: managing taxes and spending
- Monetary Policy: controlling interest rates and the money supply
These tools help guide the economy through good times and bad, and they affect YOU more than you might think, from student loans to job opportunities and tax deductions.Continue
Correct concepts
Solution
Drag each policy tool into the correct category
Increase government spending
Fiscal Policy
Monetary Policy
Cut income tax rates
Raise interest rates
Buy government bonds from banks
Introduce new public infrastructure projects
Reduce money supply by selling bonds
Continue
How the World Affects Your Finances
Continue
Think global, act local
We live in a global economy. Events in one country often ripple across the world, including your finances.
Continue
Interactive World map
Exchange rate changes affect your ability to travel or order products online. Job markets may also shift due to outsourcing or foreign investment.
As part of the EU, Germany’s economic decisions impact interest rates and inflation across the Union.
If a major U.S. tech company cuts jobs, it can affect European suppliers — including Rob’s internship opportunities.
A slowdown in Chinese manufacturing can raise global prices due to fewer available goods — your electronics become more expensive.
Continue
Knowledge Check
Continue
Continue
Continue
Continue
Continue
Continue
Glossary
The total value of all goods and services a country produces.Why it matters: A growing GDP often means more jobs and higher wages; a shrinking GDP = tougher times.
The cost of borrowing money or the reward for saving it.Why it matters: It affects how much you repay on student loans and how much your savings grow.
The general rise in prices over time.Why it matters: If your income doesn’t rise as fast as prices, you can afford less, your purchasing power decreases.
Interest Rate
GDP (Gross Domestic Product)
Title
Title
Title
Use this side to give more information about a topic.
Use this side to give more information about a topic.
Use this side to give more information about a topic.
Inflation
Subtitle
Subtitle
Subtitle
Government decisions on spending and taxation.Why it matters: Influences public services, taxes, and student aid. All things that affect your life directly.
The way local and international economies are connected.Why it matters: It affects job markets, prices, and the availability of goods and services in your country.
Title
Title
Use this side to give more information about a topic.
Use this side to give more information about a topic.
Globalization
Fiscal Policy
Subtitle
Subtitle
Continue
Resources
- Lusardi, A. & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy. Journal of Economic Literature, 52(1)
- Xiao, J. J. (2016). A Theoretical Framework for Financial Literacy and Financial Education. International Journal of Consumer Studies
- OECD (2018). G20/OECD INFE Policy Guidance on Financial Education in the Digital Age
🔗 Optional Resources:Continue
Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
Thank you!
Start
Fiscal Policy
Increase government spending Cut income tax rates Introduce new public infrastructure projects
Monetary Policy
Raise interest rates Buy government bonds from banks Reduce money supply by selling bonds