How well do U.S. high school seniors understand economics? Most have some understanding of the economy, but less than half are considered to be proficient, according to test results from the U.S. Department of Education.
The education department's National Center for Education Statistics tested 11,500 seniors from 590 public and nonpublic schools in 2006 for the "Nation's Report Card: U.S. Economics 2006" study. Nearly 80% of the participants passed the "basic" level, which means they have partially mastered the knowledge necessary for their grade level. Less than half (42%), however, performed at a proficient level, and 3% tested at the "advanced" category. The overall average score fell within the "basic" achievement level.
Students answered questions in three areas: market, national and international economics. Some key findings:
- 51% determined a result of removing trade barriers between two countries.
- 40% determined why industries can successfully lobby for tariff protection.
- 60% identified factors that lead to an increase in the national debt.
- 33% explained the effect of an increase in real interest rates on consumers' borrowing.
- 11% analyzed how a change in the unemployment rate affects income, spending and production.
- 72% described a benefit and a risk of leaving a full-time job to further one's education.
- 36% used marginal analysis to determine how a business could maximize its profits.
To get an idea of what students were asked, a sample question poses: If there were a decrease in the worldwide production of oil, which of the following would most likely occur?
- Global consumption of oil would increase,
- Economic growth in oil-importing countries would decrease,
- International spending on research into alternative energy sources would decrease, or
- Global exploration for new oil reserves would decrease.
Sixty-three percent of seniors correctly selected B.