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Financial Literacy and Cognitive Skills

Cognitive skills in economics and finance can be considered aspects of an individual’s financial literacy. Similar to reading or mathematics, the level of literacy within the domain of economics and finance determines the performance of individuals in handling financial problems. Financial literacy is considered a desirable focus of educational efforts, and it has been identified as a 21st-century skill. Within the Organisation for Economic Co-operation and Development (2013) financial literacy program, it has been defined as follows:

Financial literacy is knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in ...

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