Price Stability (quick question) (1 Viewer)

[Tha Wishkah]

are price stability and inflation the same thing?

if not what does the government do about price stability?

i just assumed they were the same.

thanks.

 

[Kirsty Xx]

PRICE STABILITY is a goal of government economic policy seeking to restrain the growth rate of the general price level, essentially meaning low inflation.

So it refers to keeping inflation (or the sustained increases in the general price level) at an acceptable level. This DOES NOT mean that the government aims to eliminate inflation altogether; instead, it aims to sustain inflation at a level that will cause minimal distortion to the economy.

 

[Tha Wishkah]

thanks heaps.

 

[Kirsty Xx]

No sweat I hope that cleared things up for you.

 

[jessi90]

yes, when you see price stability, think inflation.