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?

Answer preview

Expansionary monetary policy is implemented in a country if there is a need to increase the supply of money. It helps to boost the economy whenever there is a recession. However, this policy causes inflation in a country. Inflation happens when the prices of products and services go high. That is, the unit of money in a country reduces in value, thus buying fewer products than in previous years. Expansionary monetary policy is enforced in a nation by increasing the money spending. As a result, people end up having more disposable income, which causes the price of products and services to go high. As the policy continues, the price of products continues to increase, causing inflation. On the other hand, monetary policy is essential in sustaining effective economic development. What this means is that monetary policy should be applied for a short period to achieve positive long term outcomes. However, when the rules of expansionary monetary policy continue to be functional for a long time, it might ruin the economy by increasing financial instability (Paul, 2016).

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