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Macroeconomics , Sixth Edition
William Boyes, Arizona State University
Michael Melvin, Arizona State University
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Alan Greenspan's February 2005 Report

Twice each year, the Chair of the Federal Reserve Board of Governors is required to provide a report to Congress on the state of the economy. Read Alan Greenspan's February 2005 testimony.


  1. How does Greenspan characterize the overall state of the economy at the time of the report?
  2. Based on Greenspan's testimony, what changes did he perceive occurring in aggregate demand and supply during 2004 and early 2005?
  3. Based on this testimony, did Greenspan believe that the economy was operating at potential GDP, below potential GDP, or above potential GDP, in February 2005. Explain.