And that can have negative effects for the economy, he said. Margaret Miranda, a 60-year-old home health aide who lives in Truth or Consequences, New Mexico, was stumped by the question on quantitative easing.
She works part time for $8 and $9 an hour, and says wages are not keeping up with costs. She thinks unemployment is too high. But she did not know the Fed is charged with maximizing employment and stabilizing prices, let alone what quantitative easing is. She thought it might have to do with regulation.
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"I was asking my husband, if he'd heard anything, because he does stocks and all that," she said in an interview. "He didn't really know either."
To Michael Woodford, a Columbia University professor whose writings on QE have been hugely influential at the Fed and other global central banks, Miranda's lack of knowledge shouldn't matter.
"The beliefs of the general public... isn't the primary channel that the Fed has been relying upon," Woodford said.
More relevant, he said, is whether bond traders understand the Fed's intent. If they drive interest rates down in response to QE, the program can be effective if those low rates then drive spending.
Larchmont, New York, resident Lynda LaMonte, 49, lost her job in the Great Recession and now works part time as a communications specialist for an economic research firm.
She too picked the wrong definition for QE. But a conversation with her made it clear that LaMonte understands the Fed's goals and, specifically, the goals of its bond-buying program. She supports a cutback. "It's almost like we've got Wall street dependent on that money," she said.
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Michael Griggs, who is 67 and retired, also picked an incorrect answer, saying QE means the Fed is repeatedly lowering its official rate. But in an interview, Griggs was able to articulate one of the Fed's primary goals - to control inflation - and knew that one of QE's objectives is to reduce unemployment.
But to some, such a fuzzy understanding of what has become a critical monetary policy tool is not enough.
"When making investments, or taking out a loan, it's terribly important that we understand how the decisions taken in Washington affect us," said Carl Tannenbaum, Northern Trust's chief economist.
QE is unlike the Fed's traditional tool of raising and lowering short-term interest rates, and the public needs to understand its benefits, and risks, to better inform their decisions.
"The Fed at times has not done a very good job of explaining what it is up to," Tannenbaum said. "It's also fair to say that the state of financial literacy in the United States offers important room for improvement."