It will continue to monitor the economic outlook and financial developments and is prepared to provi

It will continue to monitor the economic outlook and financial developments and is prepared to provi

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“It will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery.” The Fed’s statement indicates it’s focused on an “inflation level”. In economics, Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time. An inflation level below the preferred long-term was the main reason to provide additional stimulus also known as “monetary policy” which the monetary authority of a country controls the supply of money, often targeting a rate of interest to attain a set of objectives oriented towards the growth and stability of the
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This note was uploaded on 05/02/2011 for the course FINANCE 9924603 taught by Professor Ssgdbfb during the Spring '11 term at Kyung Hee.

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It will continue to monitor the economic outlook and financial developments and is prepared to provi

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