The British public's grasp of broader economics is 'generally very weak,' according to a study which quizzed people on terms such as GDP and deficit.
Less than half of those tested understood that GDP related to the size of the economy and dismissed the concept as 'economic jargon'.
Personal experience was also found to breed scepticism of official statistics when they fail to mirror what individuals are seeing in their own lives - participants queried whether 'low-quality jobs' should even be counted as employment.
The authors of the report, conducted by the Office for National Statistics' think tank, warned that such 'lack of basic understanding' weakens government accountability.
Told that the unemployment rate was 3.8 per cent - at the time of research - less than 40 per cent believed it to be accurate
Johnny Runge, researcher at the ONS' Economic Statistics Centre of Excellence, said: 'In some instances where the economy is seen as important for people's personal finances, such as interest rates due to their impact on mortgages, there is a reasonable level of public understanding.
'However, public understanding of broader economic concepts is generally very weak, leading to questions about people's ability to understand economic news stories and to evaluate the economic element of government performance.
'Many feel economics is confusing and complicated, and regret they are unable to understand it.'
Some 1,665 online respondents and 130 focus group participants from London, Birmingham and Manchester were tested on their knowledge of key concepts.
Higher marks were skewed in favour of people who were older, male and the higher educated.
People overall performed better with terms that pervade their daily lives, such as inflation and interest rates, than those relating to the broader economic picture such as GDP.
Respondents were much more comfortable discussing familiar components such as inflation, where 63 per cent managed to correctly define the term
Higher marks were skewed in favour of people who were older, male and the higher educated
Asked to identify the correct definition of GDP, only 47 per cent of online respondents correctly answered that it corresponded with the size of the economy.
Twenty-eight per cent said 'don't know', and 20 per cent thought it was something to do with either the value of the pound, exports, the budget, wages or taxes.
Focus groups fared little better. Mr Runge said: 'In fact, GDP was seen as economic jargon, contributing to the feeling that economics was largely inaccessible to them.'
Quizzed on what GDP meant, one man from Birmingham said: 'I don't know, I've read about it a lot, but I obviously haven't digested what it means.'
Respondents were much more comfortable discussing familiar components such as inflation, where 63 per cent managed to correctly define the term.
The authors believe this is because they 'paid close attention to price changes in their personal consumption, especially due to its impact on shopping costs including fuel, food, tobacco and alcohol.'
But politicians will likely be alarmed by the public's view of unemployment figures, which they widely distrust.
Participants were asked to self-report how familiar they felt with terms. Once told they would be tested, their confidence dipped across the board
They were given a hypothetical population of five people consisting of a 13-year-old pupil, a 33-year-old with no job but looking for work, a 45-year-old full time worker, a 52-year-old full time worker, and an 89-year-old pensioner. Only half of the hundreds of respondents correctly answered the unemployment rate was 20 per cent
Do you know your inflation from your interest rates? Key terms explained:
GDP: The overall size of the economy. Usually calculated by adding household spending, investment, Government spending and net exports.
Inflation: The changes in price for goods and services of a period of time.
Interest rates: A percentage charged on the total amount you borrow or save.
Deficit: How much more a country spends than it earns.
Unemployment rate: The percentage of people who are economically active but not in work.
Told that the unemployment rate was 3.8 per cent - at the time of research - less than 40 per cent believed it to be accurate.
The report said people disbelieved the statistics because it did not reflect their own experiences.
'This led to distrust in unemployment statistics, which were said to be 'massaged', 'fudged' or 'manipulated' by governments to reflect well on government performance.'
Scepticism was also bred because people did not know how the figures were calculated and were unaware that only 'economically active' people were included in the statistics.
They were given a hypothetical population of five people consisting of a 13-year-old pupil, a 33-year-old with no job but looking for work, a 45-year-old full time worker, a 52-year-old full time worker, and an 89-year-old pensioner.
Only half of the hundreds of respondents correctly answered the unemployment rate was 20 per cent, comprising just the 33-year-old.
Mr Runge said that the report lays bare the need for statistics to be better communicated and free of jargon which 'is not only detrimental to people's engagement, by making economics inaccessible to the public, but it can also negatively affect people's understanding.'