In macroeconomics, three goals countries have are: economic growth, price stability and full employment. Economic growth means a nation's ability to produce more goods and services over time.
<h3>What is inflation?</h3>
Inflation refers to an excessive rise in the prices of goods and services over time, weakening purchasing power. A small, however, positive inflation is economically good, while high inflation tends to impair the economy's long-term performance.
<h3>What are the phases of business cycle?</h3>
- Expansion: The first phase in the business cycle is expansion.
- Peak: The economy then reaches a saturation point, or peak, which is the second stage of the business cycle.
- Contraction: The contraction is the stage that follows the peak phase. The demand for goods and services starts reducing drastically and steadily in this phase.
- Trough: In this phase, the economy’s growth rate becomes negative.
<h3>What are the functions of money?</h3>
The primary functions of money include:
- store of value, and
- medium of exchange.
<h3>What is the purpose of government spending?</h3>
- The goal is to achieve development in the supply-side of the macro-economy.
Therefore, the correct answers are as given above.
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