The good news is that almost 80 percent of high school seniors can demonstrate a basic level of knowledge of economics and personal finance. However, less than half can be considered “proficient” in those subjects and only a tiny percentage performed at the “advanced” level or higher.

These are the conclusions of The Nation’s Report Card: Economics 2006, one of a series of National Assessments of Educational Progress (NAEP) conducted by the U.S. Department of Education. This is the first time that NAEP has tested students for knowledge of economics.

The report acknowledges the importance of economics in helping young people achieve literacy in financial matters.

“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.”

Although the results are as good as or even better than four other subjects tested by NAEP, further analysis of the statistics reveals some concerns for the financial literacy of certain student populations.

Some key findings include:

Speaking to The Christian Science Monitor, Bruce Damasio, a high-school economics teacher in Towson, Maryland, and president of the Global Association of Teachers of Economics, said, "The good news is that economics has now been brought up to the big-league status." The Christian Science Monitor suggests that because economics is now being tested in the same way as math and other major subjects, progress can be measured and teaching improved.

One basic task, said Mr. Damasio, is to help teens overcome their notion that studying economics is like having to eat broccoli. "They're afraid of it, but they do it all the time. They don't realize they're using economic logic when they make decisions," whether it's using a debit card or judging the opportunity costs in choosing a college.

"Once it's put in practical terms, they get it."

The Nation’s Report Card: Economics 2006 - National Assessment of Educational Progress, U.S. Department of Education