FinanceChallenge

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Personal Finance brings Personal Success

You can't read the news without seeing why a fundamental understanding of economics and finance is so important to the future of our youth and our country.

The admonishment of Arthur Levitt, former chairman of the New York Stock Exchange, that “the American economy is the eighth wonder of the world; the ninth is the economic ignorance of the American people,” is true.

Lou Harris and Associates recently polled and documented the extent of economic illiteracy among high school students and adults. The poll revealed that:

  • Fewer than half the students surveyed can define a budget deficit
  • Fewer than half of the adults and 1/3 of students understand what it means to say that the Gross Domestic Product has increased
  • Most adults thought that economists would recommend increasing regulations to reduce pollution rather than increasing the costs to those who pollute
  • Sixty-percent of high school students did not know that if rent controls are placed on apartments that eventually there will be fewer apartments to rent
  • Less than half of high school students surveyed understand that if the price of yen in dollars increases that Japanese cars will cost Americans more

Nobel Laureate in Economics James Tobin who, in 1981 said, “High school graduates will be making economic choices all their lives, as breadwinners and consumers, and as citizens and voters. A wide range of people will bombard them with economic information and misinformation for their entire lives. They will need some capacity for critical judgment.”