G. Hall
Economics Period 3
Current events
4-7-11
HEADLINE: Fed Chief Hints at Rate Cut
SUMMARY:
Minimum 5 sentences
This article reports on the recent remarks that Federal Reserve Chairman Alan
Greenspan made concerning a possible reduction of interest rates. Mr.
Greenspan is suggesting that a lowering of the interest rate may be imminent
in an attempt to offset the current economic setback in Asia and Europe. It is
proposed the drop would be approximately a one-quarter to one-half percent
reduction. In Mr. Greenspan's opinion, the potential of rising inflation poses a
more serious threat to the U.S. economy than global economic slowdown.
VOCABULARY:
Three economics vocab. words defined from
article
Interest rates - the rate (as a percentage) that banks charge to borrowers in
exchange for granting a loan. Typically speaking, lower interest rates spur on
consumer spending since loans are cheaper to obtain, while higher interest
rates often result in consumers taking out fewer loans thus slowing down their
purchases.
Federal Reserve - The "central" bank of the United States, the Federal
Reserve or commonly referred to as "The Fed," oversees the distribution of
money to banks. The Fed is responsible for setting interest rates and
controlling the nation's money supply.
Inflation - refers to the upward movement of prices of consumer products.
Dow Jones Industrial Average - the most commonly used indicator of how 30
of the nation's largest corporations fared in the stock market on a given day.
APPLICATION:
Three sentences minimum
Keeping informed of movements in the interest rate is very important,
especially when it comes to purchasing big ticket items like a car, a home, or
even taking out a loan for education. The slightest movement of the interest
rate, be it up or down, can greatly affect the amount that you will have to pay
each month and over the life of the loan. As a consumer and homeowner,
being able to find the lowest interest rates on loans I have can potentially save
me thousands of dollars that I can put to use for other items I want to purchase
or save for.
CITATION:
Title of article, website, date of article
URL
"Fed chief hints at rate cut." CNNfn (Sept. 12, 1998).
<http//cnnfn.com/hotstories/economy/9809/23/greenspan/>