1)Why is macroeconomic stability for a country important?

2)What are some important facts regarding macroeconomics?

3)What is an example of a successful macroeconomic policy implemented by a government?

1)Macroeconomic stability shields the country against the adverse effects of vagaries of the global market. Although it is an insufficient measure, it safeguards the economy against unexpected shocks as a way of supporting the process of growth. Fluctuations in the global market endanger the well-being of an economy. They can lead to the downfall of the GDP and lead to unexpected economic problems. Some of the most significant shocks include:

• Currency fluctuations. Instability and unpredictability of currency strength adversely affect the monetary policies of a country. Macroeconomic stability protects the economy from such effects.
• Unsustainable inflation. Every country needs to minimize its vulnerability to the impact of high levels of inflation in the global market to shield itself from harmful exposure.
• Large debt burdens. Although the global market offers opportunities for countries, it is also risky in that it can also lead to a large national debt. Macroeconomic stability serves to protect the country from the possible rise of such liabilities.

2)

In the broad field of macroeconomics, the most important facts form the basis of other facts. Some of them include:

• The economy is not a zero-sum game. Contrary to expectations, the gain of one player and the loss of another do not cancel out each other. Instead, the economy experiences continuous growth in which the gain of one participant does not necessarily mean the loss of another.
• Inflation can be good or bad for the economy. Depending on the rate of inflation, the economy loses or gains from inflation. A little inflation is advantageous while too much of it deters economic growth.
• As a function of money, storing value can disappear when inflation is extremely high. With an increase, inflation devalues money. In the case of extremity, the value that money holds completely diminishes.
• Money remains neutral. Changes in the supply of money only affect nominal variables such as exchange rates and not the real variables such as real GDP and employment.

3)To control inflation, the government is working alongside with the central bank to reduce the money supply such that the rate of interest increases that causes the less investment and it also causes the aggregate demand curve shifts leftward such that both price level and output decreases. So, in this way, the monetary policy will lower the consumer price index. There is more macroeconomic policy example such as price ceiling, price floor, etc.