Authors: Nancy Mead and Brent Sandene
Knowledge of economics is important for individuals to function effectively as citizens in an increasingly connected world economy. Economic literacy includes understanding how economies and markets work, what the benefits and costs of economic interaction and interdependence are, and that people have to make choices because resources are limited. In recent decades, the focus on economics content in the school curriculum has increased.
In this first NAEP assessment of economics at grade 12, the overall average economics score, set at 150, fell within the Basic achievement level. Seventy-nine percent of students performed at the Basic level or higher, and 42 percent performed at the Proficient level or higher, including 3 percent at the Advanced level. Results are based on a nationally representative sample of 11,500 twelfth-grade students from 590 public and nonpublic high schools.
Students answered questions representing a wide range of content from three areas: market, national, and international economics. Market economy—traditionally described as microeconomics—covers how individuals, businesses, and institutions make decisions about allocating resources in the marketplace. National economy—traditionally described as macroeconomics—encompasses the sum of decisions made by individuals, businesses, and government. International economy concentrates on international trade—how individuals and businesses interact in foreign markets. The questions described below and presented in this report illustrate the knowledge and skills assessed in these three content areas. The full assessment includes questions that cover a range of topics and difficulty levels within each content area.
What students know about Economics
|72% described a benefit and a risk of leaving a full-time job to further one’s education|
|52% identified how commercial banks use money deposited into customers’ checking accounts|
|46% interpreted a supply and demand graph to determine the effect of establishing a price control|
|36% used marginal analysis to determine how a business could maximize its profits|
|60% identified factors that lead to an increase in the national debt|
|36% identified the federal government’s primary source of revenue|
|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|
|63% determined the impact of a decrease in oil production on oil-importing countries|
|51% determined a result of removing trade barriers between two countries|
|40% determined why industries can successfully lobby for tariff protection|
|32% identified how investment in education can impact economic growth|
NCES 2007-475 Ordering information
Mead, N., and Sandene, B. (2007). The Nation’s Report Card: Economics 2006 (NCES 2007–475). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education, Washington, D.C.
For more information, see the results of the 2006 Economics assessment on the Nation's Report Card website.