Divergent growth rates of monetary aggregates are problematic because ________.
A) it means that monetary aggregates are not very accurate
B) it suggests that monetary policy is ineffective
C) it means that the effect of monetary policy becomes harder to predict
D) it suggests that the choice of monetary aggregate by policy makers does not matter

Question

Quizplus · Accepted Answer

Divergent growth rates of monetary aggregates make it harder for policy makers to predict the effect of monetary policy, which can lead to unintended consequences and difficulties in achieving policy goals. This can be particularly problematic if policy makers are relying on a specific monetary aggregate as a target for their policy.

Divergent Growth Rates of Monetary Aggregates Are Problematic Because ________