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Chairman of the Fed Alan Greenspan

Many suggest that Alan Greenspan (the chairman of the Fed) is the second most powerful man in the world. Why?

As chairman of the American Federal Reserve, Alan Greenspan stands second only to the President of the United States in terms of power; he holds the American economy in the palm of his hand. GreenspanÆs masterful control of interest rates (raising them when inflation went up and cutting them when the economy slowed down) has kept the economy from faltering and ôensured a time of spectacular prosperity in America.ö (Cunningham). Although it appears that our current economic problems cannot be resolved so simply again, Greenspan suggests that the massive trade and current account deficits can be reduced in an orderly manner that is smooth and seamless to the American people (Newsweek, March 21, 2005).

2. What do you believe will happen to European unemployment rates in the future? Explain.

European unemployment rates are currently at crisis level. GermanyÆs rate is higher than it h`s been for 73 years (Financial Times, February 28, 2005), and other European countries also suffer from persistently high unemployment. This is not a problem that is likely to be resolved any time soon, since it appears to be primarily due to issues that are deeply ingrained in the European mentality and way of doing business, primarily trade unions and certification requirements. Europe is rife with competent workers that cannot get jobs because trade unions insist that they have proper certification. That certification requires them to return to school and pass equivalency tests, steps that take time and put a drag on the European economy.

3. Inflation has been low in recent years. Why? Also, what do you think will happen to inflation in the future? Explain.

One of the reasons inflation has been low is that the American Federal Reserve keeps a tight control on the rate of inflation. When inflation begins to rise, the ...

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Chairman of the Fed Alan Greenspan. (1969, December 31). In LotsofEssays.com. Retrieved 08:18, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1713020.html