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. Explain how expansionary monetary policy leads to inflation whereas monetary policy in the short and long run can influence real output.
3. Discuss how price stability is a foundation for stable economic policy. Should the government always intervene to correct price instability? Why?
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