STABILIZATION POLICIES: Economic policies undertaken by government to counteract business cycle fluctuations and prevent high rates of unemployment and inflation. These are also termed counter-cyclical policies. To counter a business cycle contraction and high rates of unemployment, expansionary policies that promote increasing economic activity are appropriate. To counter an inflationary expansion, contractionary policies are recommended.

     See also | economic policies | fiscal policy | monetary policy | business cycle | unemployment | inflation | expansionary fiscal policy | expansionary monetary policy | contractionary fiscal policy | contractionary monetary policy |

STABILIZATION POLICIES, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: September 26, 2023].

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A measure of the average of a group of prices calculated as a ratio to prices in a given time period (that is, a base year). A price index is primarily used to compare relative prices, or changes in the group prices over time. Such an index is a handy indicator of overall price trends. Two common price indexes that surface in the study of macroeconomics are the Consumer Price Index (CPI) and the GDP price deflator. Both are used to indicate the macroeconomy's average price level and to estimate the inflation rate. The Dow Jones Industrial Average (the Dow), Standard & Poor's 500, and the NASDAQ are well-known indexes of stock market prices.

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