What is a possible reason for the Fed's inability to prevent a recession?
A) The Fed has too much power over M1 and M2 and can flood the money supply.
B) Much of the information about the economy is unknown when the Fed is making policy.
C) Firms and individuals do not often understand the goals of the Fed.
D) The Fed often performs complex and conflicting maneuvers at the same time.

Question

Quizplus · Accepted Answer

Despite the vast amount of economic data available to the Fed, there are still many unknown factors and uncertainties that can impact the economy and lead to a recession. The Fed does it best with the available information, but there are always unknowns that can influence the outcome.

What Is a Possible Reason for the Fed's Inability to Prevent