Answer :
Final answer:
Countries pursue the macroeconomic goal of stable prices to prevent inflation, promote economic growth, and support income distribution.
Explanation:
Countries pursue the macroeconomic goal of stable prices for several reasons. Firstly, stable prices prevent inflation, which is the sustained increase in the general price level of goods and services. When prices are stable, individuals and businesses can plan their financial decisions effectively without the fear of rapidly rising prices eroding their purchasing power.
Secondly, stable prices promote economic growth. Price stability creates a favorable environment for investment, as businesses can make long-term investment decisions without the uncertainty that comes with unpredictable price changes.
Lastly, stable prices are important for income distribution. Inflation can hurt low-income individuals the most as their wages may not keep up with rising prices. By maintaining price stability, countries can ensure that the economy benefits all members of society.
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