EXPLANATION ON REDENORMINATIONMarket Stability is a term used by economists to describe a market system that displays only tiny output growth fluctuations and has a long track record of low inflation. All the advanced economy’s central banks, and those of most of the rest of the world, see economic stability as a desirable state. Several factors contribute to a nation’s economic stability, including geographical location, human capital, weather, technology development, infrastructure levels, natural resources, commodity prices, and its political system. For some economies, a lack of natural resources has not prevented them from being among the most stable in the world. Japan, a very-densely populated group of islands with relatively very few natural resources, has an extremely stable economy. Countries that enjoy stability have continuously improving efficiencies, greater productivity, and low levels of unemployment. Advantages of having a stable economy include increased productivity, improved efficiencies, and low unemployment. Common signs of an instability are extended time in a recession or crisis, rising inflation, and volatility in currency exchange rates. IMPACT OF MARKET STABILITY ON THE MODERN ECONOMY Stability can increase certainty, I nnf a finance manager feels he knows exactly what the outcomes of a project would be and is willing to act as if no alternative were in existence, he will be presumably acting under conditions of certainty. Thus, certainty is a state of nature which arises when outcomes are known and determinate. Encourage investment, before making an investment, the investor should consider the fluctuations in national and international economic trends. The level of volatility will have an impact on the amount of returns that the investment yields. Market volatility is usually associated with investment risk. Promote economic growth, is measured by an increase in gross domestic product (GDP), which is defined as the combined value of all goods and services produced within a country in a year. Many forces contribute to economic growth. However, there is no single factor that consistently spurs the perfect or ideal amount of growth needed for an economy. Unfortunately, recessions are a fact of life and can be caused by exogenous factors such as geopolitical and geo-financial events. Improve living standards Standard of living is the amount of goods and services available to purchase in a country.Real GDP per capita and Gross National Income per capita are the two most common ways to measure the standard of living. Increased productivity is a central concept in modern economics and an important measure of business performance. It can also be surprisingly elusive when it comes to defining or measuring productivity for your specific business. To top it off, the term productivity is also commonly used in a more general sense to refer to worker performance. In order to explain the meaning of productivity in a new business, a few examples are helpful. Productivity improvement, then, means getting more done – more output – with the same amount of input. Even better, the best improvements can allow your business to increase productivity while decreasing cost. low unemployment A low unemployment rate means the number of people actively seeking work is low relative to the population of active workers. A low rate has several important advantages for society at large, as well as for individual workers and business owners. Economic stability refers to an economy that experiences constant growth and low inflation. Advantages of having a stable economy include increased productivity, improved efficiencies, and low unemployment. Common signs of an instability are extended time in a recession or crisis, rising inflation, and volatility in currency exchange rates. An unstable economy causes a decline in consumer confidence, stunted economic growth, and reduced international investments.