Which is a limitation of monetary policy in stabilizing the economy?
A) Central banks have too much control over the money supply.
B) Most central bank policymakers are controlled by the government.
C) Monetary policy is subject to uncertain lags.
D) Central banks have no discretion over policy tools.

Question

Quizplus · Accepted Answer

Monetary policy is subject to uncertain lags, which means that the effects of changes in monetary policy may not be immediately felt and can take time to fully impact the economy. This can limit the effectiveness of monetary policy in stabilizing the economy as timely action is required in the face of economic shocks.

Which Is a Limitation of Monetary Policy in Stabilizing the Economy