Discretionary monetary policy has the drawback that it
A)must lead to very high inflation.
B)makes inflation expectations harder to manage.
C)is currently illegal in the United States.
D)cannot be implemented using changes in the federal funds rate.
E)None of the above answers are correct.

Question

Quizplus · Accepted Answer

Discretionary monetary policy can make inflation expectations harder to manage because it introduces uncertainty about future policy actions, which can lead to less predictable economic outcomes.

Discretionary Monetary Policy Has the Drawback That It