The goal of stable prices is the rate at which prices increase over time. Inflation is when prices rise and deflation is when prices go down. Inflation rate is measured by the consumer price index (looks at prices of goods people buy). Stable prices is achieved by fiscal and monetary policy.
-Regulations can be put in place like a price ceiling, however, if the cost of production goes up business can not higher their prices enough to cover the cost. - They can increase spending during a recession to get people to spend again (fiscal policy) - can increase or decrease money supply and interest rates to keep prices stable (monetary policy)
want to keep inflation between 1-3%
Stagflation- high unemployment and high inflation
Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)
The goal of stable prices is the rate at which prices increase over time. Inflation is when prices rise and deflation is when prices go down. Inflation rate is measured by the consumer price index (looks at prices of goods people buy). Stable prices is achieved by fiscal and monetary policy.
-Regulations can be put in place like a price ceiling, however, if the cost of production goes up business can not higher their prices enough to cover the cost.
- They can increase spending during a recession to get people to spend again (fiscal policy)
- can increase or decrease money supply and interest rates to keep prices stable (monetary policy)
want to keep inflation between 1-3%
Stagflation- high unemployment and high inflation
Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)