Growth of the American Economy
Price stability refers to the absence of significant fluctuations in the general price level of goods and services over time, allowing for a predictable economic environment. This concept is crucial because it fosters consumer confidence, encourages investment, and supports sustainable economic growth, all of which are essential for a well-functioning economy. Maintaining price stability is particularly challenging during periods of stagflation, where high inflation and stagnant economic growth coexist.
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