Why do policymakers have the goal of stable prices?
A) Stables prices always keep the economy in expansion
B) Firms make too much money when prices are rising
C) Inflation is always associated with wars
D) Inflation imposes costs on society
E) Inflation is always associated with trade deficits

Question

Quizplus · Accepted Answer

Inflation imposes costs on society as it reduces the value of money and leads to uncertainty in the economy. Stable prices help to maintain the purchasing power of the currency and promote economic stability.

Why Do Policymakers Have the Goal of Stable Prices