This document summarizes key economic challenges such as inflation, unemployment, and poverty. It discusses causes and types of each challenge and policies governments use to address them. Inflation is defined as a general increase in price levels rather than specific price changes. Governments control inflation through monetary policy and interest rates. They address unemployment through automatic stabilizers like unemployment insurance and address poverty with programs like welfare, food stamps, and income tax credits.

1. Chapter Economic Challenges 17

5. Significant inflation is almost always associated with slower growth in real GDP.

18. Poverty Line