Financial Literacy is a paper that demonstrates widespread financial illiteracy among the United States population, particularly among specific demographic groups. Produced by the National Bureau of Economic Research, the paper shows that most individuals cannot perform simple economic calculations and lack knowledge of basic financial concepts, such as the working of interest compounding, the difference between nominal and real values, and the basics of risk diversification.

The author argues that while it may not be feasible to transform financially illiterate people into sophisticated investors, it may be possible to teach them a few principles about the basics of saving and investing.

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