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Free market outcomes often maximize social wellbeing. Moreover, market outcomes are often characterized by Pareto Efficiency, meaning that any alternative to the market outcomes will make some people in society worse off. With these recognitions in hand, it becomes apparent why most economists view free market institutions favorably.

However, these attractive features of market outcomes are only possibly realized if several conditions are met. One set of requirements is that individual decision makers (e.g., consumers, businesses, investors, and lenders/borrowers) must be not only rational but also fully informed. Rationality simply means that a decision maker has a well-defined goal and takes actions to achieve that goal as best as possible. Having full information would require, in part, that the decision maker is aware of all available courses of action and accurately understands their implications on present and future benefits and costs. When thinking about decisions made by individuals in financial markets, this is no small assumption.

Financial literacy is the capacity to both effectively understand and assess financial instruments, and potentially implement an array of monetary based skills, such as budgeting, saving, investing, borrowing, and financial planning. Financially literate individuals can make more informed decisions, resulting in greater financial stability and well-being. Basic financial literacy is a prerequisite to achieving financial wellness and to effectively using money as a tool to achieve an overall higher quality of life. In-line with the emphasis of our mission on educating students about the foundations of market institutions, the Bagwell Center鈥檚 Financial Literacy Improvement Project (FLIP) aims to increase the financial literacy of the 网红头条 community.

KSU鈥檚 5-module financial literacy course offered by the Bagwell Center for the Study of Markets and Economic Opportunity in partnership with CARE Services and the Office of Scholarships and Financial Aid.

FLIP Features provide an elementary discussion and overview of important topics related to financial literacy. Each Feature is an expression of the views of the writers (and not the Bagwell Center). FLIP Features are written for general educational purposes only and should not be taken as universal, individual advice (as the circumstances of every person are unique).

• "Want to Become a Millionaire? The Importance of Saving Early in Your Career and Investing in High-Return Assets" by Stephen Brincks (Fall 2024)

Coming in Spring 2025.