If we know that expansionary monetary policy produces no real economic growth, b

Question

If we know that expansionary monetary policy produces no real economic growth, but only leads to inflation, why does it exist?
Answer
a. Because policymakers will try to reduce the unemployment caused by rising production costs (cost-push inflation).
b. Because policymakers tend to pursue employment targets that are sometimes too high, which causes the SRAS curve to shift back to the left (demand-pull inflation).
c. Because the Fed will at times purchase bonds that are issued to finance the deficit in order to maintain a particular interest rate target.
d. All of the above.

Explanation / Answer

b. Because policymakers tend to pursue employment targets that are sometimes too high, which causes the SRAS curve to shift back to the left (demand-pull inflation).

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