From the WSJ Journal-in-Education Program: 

The president of the Dallas Fed speaks about inflation risk and central bank independence 

This is an excellent article to use to illustrate the relationship between fiscal and monetary policies and the inflation risks associated with the Fed's direct purchases of bonds.

QUESTIONS:

1. What is the "perception of risk" that has been created by the Fed's purchases of Treasury bonds, mortgage-backed securities, and Fannie Mae paper?

2. What are the economic consequences of monetizing the debt?

3. According to Dallas Fed President Fisher, what role did the Fed play in contributing to the current crisis?

4. According to Dallas Fed President Fisher, what role did regulators play in contributing to the current crisis?

5. According to Dallas Fed President Fisher, what role did "government-anointed rating agencies" play in contributing to the current crisis?

(suggested by Edward Gamber, Lafayette College)