ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4-1/4 to 4-1/2 percent.

Detailed explanation-2: -The 2% inflation target is key to the Federal Reserve’s vision for stable prices in the U.S. economy, according to the Federal Reserve Bank of St. Louis. Canada, Australia, Japan and Israel are among the many economies that include 2% in their inflation rate targets, according to the International Monetary Fund.

Detailed explanation-3: -The Fed’s economic goals prescribed by Congress are to promote maximum employment, stable prices, and moderate long-term interest rates. The Federal Open Market Committee (FOMC or Committee) is responsible for monetary policy decisions to achieve these goals.

Detailed explanation-4: -In general, most experts deem unemployment between 3% and 5% to be ideal, though there is no single consensus on what constitutes healthy unemployment.