Question

Which statement best explains how economic indicators are used to evaluate the macroeconomic goal of maintaining stable prices?

A.
The fewer changes to the Consumer Price Index, the closer the economy is to maintaining stable prices.
B.
The lower the aggregate demand, the closer the economy is to maintaining stable prices.
C.
The higher the aggregate demand, the closer the economy is to maintaining stable prices.
D.
The more changes to the Consumer Price Index, the closer the economy is to maintaining stable prices.

Answer 1

The fewer changes to the Consumer Price Index, the closer the economy is to maintaining stable prices.

Answer: Option A

Step-by-step explanation:

Consumer price index is known as the variation in the level of prices of the goods and services in the economy. This is considered as a good way of measuring the level of price stability in the economy.

Lesser the changes made to the consumer price index, more stable would be prices in the economy. Because more changes in the consumer price index means more fluctuations and more destabilization.