ECO 320 - Tomas Charnik ECO320 Dr. Kublawi Price stability...

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Tomas Charnik ECO320 Dr. Kublawi Price stability – the most important role of the central bank is to attain price level stability. It is held that price stability promotes economic growth and people's well being by increasing the efficiency of the market mechanism. Full employment - all available labor resources are being used in the most economically efficient way. Full employment embodies the highest amount of skilled and unskilled labor that could be employed within an economy at any given time. The remaining unemployment is frictional . Economic growth - is an increase in activity in an economy. It is often measured as the rate of change of gross domestic product (GDP). Economic growth refers only to the quantity of goods and services produced; it says nothing about the way in which they are produced. Financial market stability - the stability of financial markets is also fostered by interest rate stability because fluctuations in interest rate create great uncertainty for financial situation. Financial market stability is the fundamental element regarding Economic Growth and its
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