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Homework answers / question archive / How can I measure the macroeconomic stability of an "X" country?
How can I measure the macroeconomic stability of an "X" country?
Macroeconomics stability of an economy can be measured by the volatility of key indicators, and some of them are the following:
1. Inflation: Inflation is the main indicator; hyperinflation and deflation imply an unstable economy.
2. GDP growth: An increase in GDP in the indicator of a stable economy.
3. Unemployment rate: Higher unemployment rate indicate instability in the economy.
4. Exchange rate: A strong exchange rate implies a more stable and powerful economy.
5. Income distribution: Income distribution is also a good indicator of a stable economy. Uniform income distributions in an economy imply more stability in an economy.