Consumers Flunk Quiz On Basic Economics

More than 70% of American adults in a recent survey said they're as interested in economics as in politics, business, and finance. But half flunked an elementary quiz on basic economic concepts. The survey, for the National Council on Economic Education, evaluated adult and high-school student understanding of basic economics. Other findings include:

  • Barely one-third of adults and students understand that market competition is believed to lower prices and increase quality.
  • Fifty-five percent of adults and 59% of students don't understand how government-established price ceilings work.
  • Only 52% of adults and 38% of students understand that the purpose of stock markets is to bring together the buyers and sellers of securities.
  • Just 54% of adults and 23% of high-school students know a budget deficit occurs when the federal government's expenditures exceed its revenues for that year.
In April the Council launched a five-year campaign to increase economic literacy among students and adults.
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