Business and Personal Finance Dictionary

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• FEDERAL OPEN MARKET COMMITTEE (FOMC)
  
  The 12-member Open Market Committee of the Federal Reserve Board makes policy decisions that influence the health of the American economy. The committee, whose decisions are closely watched by investors and market analysts, meets eight times a year to evaluate the threat of inflation or recession. Based on its findings, the FOMC determines whether to change interest rates or alter credit policies to curb or stimulate economic growth. It may, for instance, raise the interest rate that the Federal Reserve charges member banks to borrow money. This move would be an effort to tighten the availability of credit in the economy and thereby limit growth. Or it may decide to buy government securities to increase the amount of money in circulation.
  
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