Time Lags in Monetary Policy Can Cause

Time lags in monetary policy can cause

A) short- term monetary policy to work more effectively than long- term targeting.
B) difficulty in the timing of appropriate policy and can even lead to destabilization.
C) an expansionary policy to have too little an effect because it takes much longer to work than was expected by policymakers.
D) monetary policy to work more slowly and more smoothly than was initially predicted by economists.
E) monetary expansions to work very quickly but cause monetary contractions to work very slowly.