Why did the government use expansionary monetary policies in the late 1970s, and what was the principal negative macroeconomic effect of these policies?

What will be an ideal response?

In the late 1970s the U.S. government used expansionary monetary policies in an attempt to reduce the unemployment rate and to increase the growth rate of output. Relying on the Keynesian model to explain the slowdown in economic growth, policymakers concluded that aggregate demand had declined and that expansionary monetary stabilization policies could pull aggregate demand back to the full-employment level of output. However, aggregate demand had not declined. The recession was created by a decline in aggregate supply caused by an increase in the price of oil. Expansionary monetary policies caused aggregate demand to increase along the new aggregate supply curve, which caused inflation to increase further.