Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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What is one supporting aim of macroeconomic policy?

Achieve full employment
Control inflation rate
Stabilize exchange rates
Reduce interest rates

The correct answer is: Control inflation rate

One supporting aim of macroeconomic policy is to control the inflation rate. Controlling inflation is crucial because it helps maintain the purchasing power of money, ensures economic stability, and fosters a predictable environment for both consumers and businesses. High levels of inflation can erode savings, distort spending patterns, and create uncertainty in the economy, which can hinder economic growth. By actively managing inflation through monetary policy tools, such as adjusting interest rates or influencing money supply, policymakers aim to keep inflation within targeted limits, often aligned with other economic goals like full employment and sustainable growth. This balancing act is essential in ensuring the economy remains healthy and operates efficiently. Other options represent important macroeconomic aims as well, such as achieving full employment or stabilizing exchange rates, but controlling inflation is particularly vital for sustaining overall economic stability and growth.