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 data 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

The Fed relies on economic data to make policy decisions, and much of that data is not known until after the fact. This means that the Fed may not have enough time to react and prevent a recession.

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