Recognize fiscal policy as an important tool of government intervention in a market economy. Recognize monetary policy as an important tool of government intervention in a market economy.

12.1 Learning Outcomes:

Recognize fiscal policy as an important tool of government intervention in a market economy.
Recognize monetary policy as an important tool of government intervention in a market economy.
Evaluate effects of changes in a tax policy.

12.2 Action Required:

Watch the video using the following link:

(908) Introduction to inflation | Inflation – measuring the cost of living | Macroeconomics | Khan Academy – YouTube
12.3 Test your Knowledge

Explain inflation. Is zero inflation good target?
12.4 Instructions

Answer the given question in your own word and it should be less than 100 words.

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