Why are many economists skeptical of the Fed's ability to fine tune the economy?
A) monetary policy only affects output in the long run
B) lags in policy make it difficult to properly time policy
C) fiscal policy can be implemented more quickly than monetary policy
D) monetary policy does not have any effect on output

Question

Quizplus · Accepted Answer

Lags in policy, such as the time it takes for changes in interest rates to affect the economy, make it difficult to properly time policy.

Why Are Many Economists Skeptical of the Fed's Ability to Fine