…peoples’ ability to process economic information and make informed decisions about financial planning, wealth accumulation, debt, and pensions.
Lusardi and Mitchell, 2014
1. Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?
a. one business or investmentb. multiple businesses or investmentsc. don’t knowd. refuse to answer
2. Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?
a. lessb. the samec. mored. don’t knowe. refuse to answer
“Financial literacy is knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.”