Explain how expansionary monetary policy leads to inflation

Legislative Remedies and Monetary Policy

Topic 7 DQ 2

1. Have legislative remedies, like the Clean Air Act and Clean Water Act, produced results to mitigate negative externalities? At what cost? Have the benefits of the legislation outweighed the costs to industry? Identify and describe two additional measures that state and/or city governments are undertaking to reduce contributions to climate change by addressing degradation of air, land, and water (e.g., efforts in California, City of Phoenix).

2. As we examine our second discussion question, I wanted to offer a couple questions to help spur the conversation. Explain how expansionary monetary policy leads to inflation whereas monetary policy in the short and long run can influence real output.

3. As we examine our second discussion question, I wanted to offer a couple questions to help spur the conversation. Discuss how price stability is a foundation for stable economic policy. Should the government always intervene to correct price instability? Why?