Catch up on stories from the past week (and beyond) at the Slashdot story archive

 


Forgot your password?
Close
typodupeerror
×
The Almighty Buck

Journal capoccia's Journal: Illiterate Financially? 23

Journal by capoccia

The National Council on Economic Education sponsored a survey of economic literacy among students and adults in the United States. The average adult scored 57% and the average high school student scored 48%. Take the test, and see how you compare.

Only 6% of adults and 3% of students scored an A, so I should feel good about only missing one question out of twenty, but it's still frustrating because I misread the question. If I had read the question correctly, I would definitely been able to eliminate two wrong answers. Maybe I would have even gotten the question correct.

This discussion has been archived. No new comments can be posted.

Illiterate Financially? More

Illiterate Financially?

Comments Filter:
  • Yay me, I got 90%.

    Ones I got wrong: 1 (I'd say I'd slightly disagree with their answer, but it's a fair cop) and 20 (I have to say "WTF?" at their answer).

    Cheers,

    Ethelred

    • Ones I got wrong: 1 ... and 20 ...

      On number one, this is a question about basic microeconomics. A highly competetive marketplace results in lower prices and higher quality. In the real world, companies would take actions to halt or slow this progression to this type of competiton, but that's not really the point of the question.

      Number twenty was the one I missed. I misread the question as, "Which one of the following statements ... is not wrong?" So I picked B. Money does make it easier to save becau
      • EEK! The question 20 was which option was *wrong.* No wonder I got it wrong. I totally thought it had read asking which choice was *right.* Yikes. Please ignore my other post trying to defend my answer (of B). B is correct, that just wasn't the question... silly people asking multiple choice "which one is incorrect" questions. Err... actually, silly me for not being able to read....
        • Evidently not the only one who missed 20 (brag: the only one). I would think that 20 should be thrown out, or fixed in their final data.

          Isn't the first rule of multiple choice tests not to ask negative questions? Otherwise you are testing reading comphrension, instead of the subject matter.

      • In the real world, companies would take actions to halt or slow this progression to this type of competiton

        I guess that's why I got it wrong -- I was reading too far into it (I was presuming a race to the bottom to get the lowest price).

        Which one of the following statements ... is not wrong

        Gahhhhh, I misread it even worse -- I thought it was asking which was right. I flew over the question, saw "makes it easier to exchange goods and services" and wondered why the devil it said that was wrong (and s

      • I too missed questions 1 and 20. I reasoned that question one results in lower prices, which in the long term necessitate lower quality (unless you figure out how to buy some magic pixie dust from IBM).

        I know that the theory is that quality goes up as competition increases - but in practice, I have my doubts. ;-)

        And I suffered cognitive dissonance* while reading answer 3 to question 20. I knew they wanted me to be able to identify the bogus statement - I just didn't read answer 3 closely enough.

        *cognitiv

    • I scored 95%, and the one I got wrong was 9. It was the word "should" that I struggled with. Sure, in RL, producers do have a lot of say in what gets produced, but "should?". One could debate.

  • Granted, this is the first econ test I have taken in about 10 years but that is still no excuse for misreading question 20.

    Question three I believe could be A or C as both are investing, of course I picked the one that did not match the key :-). Of course, neither are economy expanding.
    • Question three I believe could be A or C as both are investing

      Businesses invest by borrowing money. So it would cost more to make this investment because of higher interest rates. So businesses would invest less when there are higher interest rates. This is the whole basis that the Federal Reserve uses to regulate the economy by changing interest rates.

      A, B & C are all investing, but C is the only answer where the investor is gaining the interest instead of paying it to the lender.
      • I think that what Guy was thinking was that business would invest in banks. That's not traditionally what you think of when you think of businesses investing - you think of them investing in other businesses. If they can get this great rate of return just by leaving their money in a bank, why would they bother investing? You're correct in noting that.

        I think Guy probably (and I had to think about that one hard before I answered it myself) figured that businesses putting money in banks was investing (whi
      • Actually borrowing money is not "investing". Businesses invest by spending money on expansion. They may also issue "commercial paper", i.e., lend money a higher rate that the banks in the question have just increased.

        C is in fact more correct, thus I was wrong, but still.
        • Actually borrowing money is not "investing".

          I'd say it is, but the investor is the one lending the money, not the one borrowing it. You're right, though, the borrower isn't investing...

          I got 95% - everything except #16, mostly because I've experienced the result of government 'services' too often to think anyone benefits who should do so ;-)

    • I don't think you read question 20 wrong - I think that their answer is wrong. Money CAN hold its value well in times of inflation, but that's more a question of the economy, not the currency. I think the correct answer was B.

      I also got 90% - I'm quite disappointed by that, as my major in school was econ. I misread the question about price caps on apartment rent. Alas, such is life.

      • Re:Only 90% (Score:2, Interesting)

        by GMontag ( 42283 )
        By definition money is losing it's value during inflation, a state where the value of money is declining in relation to goods and services.
      • Money CAN hold its value well in times of inflation, but that's more a question of the economy, not the currency.

        Can you give me an example of how this would work? My understanding was that the definition of inflation means that money was losing value with respect to goods and services. So what would be the scenario where money would hold its value better than goods during an inflation?

        "Money makes trading goods and services easier" is definitely true. The only way to trade without money is through ba
        • oops. I guess you already knew that [slashdot.org]. That's what I get for taking so long to type my reply.
        • I was thinking more in terms of world markets. Some currencies are historically more stable than others. Sometimes the world politics give the world economy a hit that produces inflation that can cause most currencies to devalue, but a few may remain strong. The strength of the tender amid global inflation is mostly a question of the issuing economy. That's what I meant when I said that it CAN hold it's value, but whether or not it will has less to do with the currency than it does with the issuing econ

  • I got 85%

    I missed #20 because I read the question wrong also. It's amazing that just about everybody did the same.

    The other two I missed were #9, which should have been obvious. I chose B thinking that they were getting after the fact that only entities that actually purchase items determine what should be produced (since producers won't produce something that isn't purchased), so I was guessing since Consumers and the Government purchase stuff, that was the answer. And the other question I missed w

    • I got a 95%.

      I missed #16 (When governments supply products and services, these products and services usually benefit) because I didn't like what I thought was the most right answer.

      Ehh, I don't(and didn't) feel like analysing it it over my morning coffee either.
  • I got a 100%. Interestingly, this is an "economic" test, and it only examines capitalist theories of economics. In it's defense, it does seem to have a strong libertarian slant to it.

    • I dunno - I think's it's pretty neutral, althogh you can find someone to take almost any stance in social sciences....

    • This is a US government organization. The US is a capitalist (mostly) state. Economic literacy for US citizens should focus on capitalism. Very few US citizens actually come in contact with a socialist system.
  • I'm surprised, but i'm glad. There were a few that i had to think about. I would note, though, that you can know ALL of those things and still be functionally illiterate when it comes to finance, because many people simply aren't exposed to examples.

Slashdot Top Deals

"Remember, extremism in the nondefense of moderation is not a virtue." -- Peter Neumann, about usenet

Close