BUSINESS ADMINISTRATION
BUSINESS POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Total demand exceeding the capacity to produce goods and services.
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Inflationary shocks such as oil price increases, wars, etc
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Money supply increasing too rapidly.
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All of these
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Detailed explanation-1: -Causes of economic instability include stock market fluctuations, fluctuations in the prices of houses and other assets, black swan events (unexpected disasters that impact the economy), and changes in interest rates.
Detailed explanation-2: -Price stability calculation varies by region. In the United States, for example, the metric used is the Consumer Price Index (CPI). Europe uses a similar metric known as the Harmonized Index of Consumer Prices (HICP).
Detailed explanation-3: -Fiscal and monetary policy can be directed to ensure stable prices. For example, the government can change and manage spending and tax policies to influence the prices and monetary policies by the central bank controlling money supply and interest rates, subsequently contributing to stable prices and economic growth.