As we are in the 4th month of 2021, the global economic recovery has started and as the people all across the globe are getting vaccinated and moving out of the covid era we thought it was a good time to take a look at the importance of economic literacy in one’s life. Economics is important for you get to know how societies, governments, businesses, households, and individuals allocate their scarce resources. The economics can also provide valuable knowledge for making decisions in everyday life as it is concerned with the optimal distribution of resources in society. So today let us briefly look at what is economic literacy and its importance.
Economic literacy is a strong one, George Stigler, a Nobel laureate in economics stated it best when he wrote “ The public has chosen to speak and vote on economic problems, so the only open question is how intelligently it speaks and votes.”
Economic literacy also gives people the tools for understanding the economic world and how to interpret events that we either directly or indirectly affect them.Nations benefit from having an economically literate population because they have the ability to comprehend and evaluate critical crisis and issues.
Importance of studying and understanding economics
There are 5 I’s to know about the importance of studying and understanding economics. They are:
Inform decisions A person can decide whether to buy a house to invest in the stock market if he has a better understanding of the economy wants to invest in.
Influences everything Economic issues have have a great impact on our daily lives this includes tax, inflation, wealth, inequality, emerging markets, energy, environment, etc,.
Impacts industries Most of all industries rely on economics for research, development, right strategies. The wide influence means economic knowledge can open you up a wide range of career options.
Inspire Business success If you own a business then knowledge on consumer behaviour and individual behaviour can help you to grow your business and a beauty what lacks in your business.
International perspective Having a basic knowledge of economics can help you understand how other countries work and implement their laws. Understanding and studying other countries economy can have a great impact on developing nations.
Economic literacy contributes to classes of knowledge in two ways:
First: “it serves as a means of communication among people, incorporating a basic logic or idea.”
Second: “it is a type of knowledge frequently needed and yet not susceptible to economical purchase from experts.
The development of basic economic literacy is an important goal for a democratic society that relies heavily on informed citizenry and personal economic decision-making. To achieve that goal will require that significant gaps in the economic education of youth be closed by giving economics a more central place in the school curriculum. More economics coursework at the precollege level sets a foundation for economic literacy, but it is only the beginning. As George Stigler reminded us long ago: "We shall have to combine vast efforts and creative experimentations if we are to produce the first economically literate society in history.”
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