Stable Prices

The third macroeconomic objective is to maintain stable prices. What exactly do economists look at when they talk about “the overall price level?” The most common price measure is the price index, known as the CPI. The CPI ‘measures the cost of a basket of goods (including items’ such as food. shelter, clothing, and medical care) bought by the average urban consumer. The overall price level is often denoted by the letter .P.

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