At the Conclusion of Its Meeting on January 30, 2013

question 40

Essay

At the conclusion of its meeting on January 30, 2013, the Federal Open Market Committee released a statement that included the following sentence: "The committee will maintain the target range for the federal funds rate at 0 to ¼ percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate as long as the unemployment rate remains above 6½ percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored." What is the significance of this statement?

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Definitions:

Financial Advantage

The benefit gained in financial terms that gives an individual or entity a better position compared to others.

Production Run

A specific period or batch of production where goods are manufactured continuously, often tracked to analyze efficiencies and costs.

Relevant Costs

Costs that are directly influenced by a specific business decision, and are crucial for cost-effective management decisions.

Differential Cost

A future cost that differs between any two alternatives.