Economic Literacy or Economic Ideology?

Abstract

The Test of Economic Literacy (TEL), is a standardized multiple choice test developed under the auspices of the Joint Council on Economic Education with esteemed economists in an advisory role. The Test of Economic Literacy (TEL) is administered in many high school economics courses both to measure economic understanding and to monitor the effectiveness of teaching. We found that some of the questions in the test have a pronounced ideological slant. We view the biases in the TEL as characteristic vices of economists. In their weaker moments, economists can slip into a thought pattern which glorifies laissez-faire microeconomics while at the same time favoring Keynesian interventionist macroeconomics; this is precisely the bias of the TEL. The next two sections examine the ideological components of the microeconomics and macroeconomics respectively. For each part, we present a few of the questions and discuss their ideological content. For the micro part, we use the TEL data bank to analyze a matched sample of students who took the test before and after a course in economics. This empirical exercise allows us to address the questions in the title of the paper: what is taught and measured, literacy or ideology?