Which describes one of the difficulties that make it hard for the Fed to effectively implement monetary policy?
A) The Fed has too much data to sort through quickly.
B) All monetary policies must be approved by Congress before being implemented.
C) The Fed's control of the money supply is incomplete and subject to uncertain lags.
D) The effects of monetary policy always offset those of fiscal policy.

Question

Quizplus · Accepted Answer

The Fed's control of the money supply is subject to uncertain lags, as it takes time for changes in monetary policy to affect the economy. This can make it difficult for the Fed to implement monetary policy effectively. Additionally, factors such as international financial markets and unexpected events can also complicate the implementation of monetary policy. A is incorrect because the Fed has sophisticated tools and methods for analyzing and interpreting data. B is incorrect because while Congress does have oversight over the Fed, it does not have approval power over each individual monetary policy decision. D is incorrect because the effects of monetary and fiscal policy can interact in complex ways, and it is not always the case that they offset each other.

Which Describes One of the Difficulties That Make It Hard