Why are tracking the consumer price index and the unemployment rate good measures of the impact of a government's decisions on society?

A) They help track the reaction of policy in the stock market.
B) They help track how the health system will react to decisions taken by the government.
C) They help track the impact of foreign policy abroad.
D) They help track how the economy reacts to decisions taken by the government.

1 answer

D) They help track how the economy reacts to decisions taken by the government.

Tracking the consumer price index (CPI) and the unemployment rate provides valuable insights into the overall economic health and the effects of government policies on society. The CPI reflects changes in the cost of living and inflation, while the unemployment rate indicates the job market's health and employment opportunities. Together, they illustrate how economic policies—including fiscal and monetary measures—affect households, businesses, and the labor market, thereby serving as good measures of the impact of government decisions on society.