In general,the Fed has not embraced a fixed-growth-rate monetary policy because:
A)its adoption would lead to a decrease in the employment rate in the U.S.economy.
B)no influential economists have come out in favor of it.
C)the Fed has to report to Congress,and Congress is not in favor of it.
D)the Fed prefers active fiscal policy.
E)they believe the economy is too complex to make such a policy work consistently.

Question

Quizplus · Accepted Answer

The Fed believes that the economy is too complex to make a fixed-growth-rate monetary policy work consistently. This is because the economy is subject to many factors that can affect growth, such as changes in technology, natural disasters, and geopolitical events. Implementing a fixed-growth-rate policy could also lead to unintended consequences, such as inflation or recession, if the policy is not adjusted in response to changing economic conditions. Therefore, the Fed prefers to use a more flexible approach to monetary policy, adjusting interest rates and other tools as needed to promote economic growth and stability.

In General,the Fed Has Not Embraced a Fixed-Growth-Rate Monetary Policy