Question 1 is about compound interest but really it’s about assessing numeracy:
Suppose you have $100 in a savings account and the interest rate was 2 percent per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
A) More than $102.
B) Exactly $102.
C) Less than $102.
D) I don’t know.
Question 2 is about inflation:
Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After one year, how much would you be able to buy with the money in this account?
A) More than today.
B) Exactly the same as today.
C) Less than today.
D) I don’t know.
Question 3 has to do about risk diversification:
“True” OR “false,” buying a single company stock usually provides a safer return than a stock mutual fund?”
A) “True”
B) “False”
C) I don’t know.
Sad fact of the matter is only around 30 percent of the respondents got all three questions right. The numbers are pretty similar around the world, even in other rich countries. Given this fact, its not be too surprising that the state of the economy is where it is…
In other words seems a majority of people like TPTB are dishonest financial dumb$hits who rather than face the truth, bury the facts (like what what was just in the news about the SANDAG clusterfuck where billion$ in shortfalls were hidden away from voters)
.
