Monetarists argue that using active discretionary monetary policy is dangerous because it is subject to:
A) information lags.
B) long-term policy determination lags.
C) short-term policy effectiveness lags.
D) information, policy determination and policy effectiveness lags.

Question

Quizplus · Accepted Answer

Monetarists argue that discretionary monetary policy is subject to information lags, as it takes time for policymakers to gather and interpret data on the state of the economy. Additionally, there are long-term policy determination lags as policymakers may take time to decide which policies to implement. Finally, there are short-term policy effectiveness lags as it may take time for monetary policy to have an impact on the economy.

Monetarists Argue That Using Active Discretionary Monetary Policy Is Dangerous