Price stability refers to a situation where the general level of prices in an economy remains relatively constant over time. This means that inflation, which is the rate at which prices rise, is low and predictable. Maintaining price stability is important because it helps consumers and businesses make informed financial decisions without the uncertainty of fluctuating prices. Central banks, such as the Federal Reserve in the United States, often aim for price stability as part of their monetary policy. They use tools like interest rates to control inflation and ensure that the economy remains healthy. Price stability contributes to economic growth and enhances the overall standard of living.