ADM 614 GCU Market Based Solutions for Pollution Abatement Discussion

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1. An externality constitutes a market failure. An example of an “negative” externality is air pollution from power-generating facilities (e.g., coal-fired power plant). Identify and explain two market-based solutions that would help to mitigate negative externalities, like air pollution? How would government, if at all, need to play a role in pollution abatement?

2. As we examine our first discussion question, I wanted to offer a couple questions to help spur the conversation. Choose an instance from the past 100 years of U.S. history where a change in the supply of money effected the economy. Explain how it was affected, including how U.S. monetary policy and the banking system were affected.

3. As we examine our first discussion question, I wanted to offer a couple questions to help spur the conversation. As a Monetarist, Milton Freidman suggested that the government should only release the amount of money into the economy that matches the GDP production. Discuss how the entire demand curve for money will adjust to the equilibrium point. Would you agree with Milton Freidman’s opinion on the ability of monetary policy to address economic problems? Explain your rationale.