Mt22005 - Economics 202 Spring 2005 Name Professor Melick Second Midterm 1 Alan Greenspans term as a Governor and Chairman of the Federal Reserve

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Economics 202 Name: _______________ Spring 2005 Professor Melick Second Midterm 1. Alan Greenspan’s term as a Governor and Chairman of the Federal Reserve Board will expire on January 31, 2006. In a surprise move, President Bush announces today (April 11, 2005) that he intends to appoint Paul Volcker as the new Chairman. As you may know, Volcker served as Chairman of the Federal Reserve from 1979-1987 and is widely credited with reducing inflation from 13.3 percent in 1979 to 1.1 percent by 1986. In a news conference held on April 11, 2005 to announce his appointment, Volcker states “It is obvious to me that the cancer of inflation is again eating away at the American economy. When I take office on February 1, 2006 I intend to use every tool at my disposal to fight this insidious disease.” Using the Classical version of the AS/AD graphical framework with misperceptions , as well as graphs for the goods, asset, and labor markets, illustrate and explain the short-run and long-run effect of the
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This note was uploaded on 05/13/2010 for the course ECON 323 taught by Professor Jakes during the Spring '10 term at Alcorn State.

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Mt22005 - Economics 202 Spring 2005 Name Professor Melick Second Midterm 1 Alan Greenspans term as a Governor and Chairman of the Federal Reserve

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