Which of the following is perhaps the greatest obstacle facing the Fed in discharging monetary policy?
A) the difficulties involved in regulating the complex structure of financial institutions
B) the problem of monetary policy lags
C) the problem of identifying a monetary measure that is closely linked to real GDP
D) the problem of coordinating monetary and fiscal policy

Question

Quizplus · Accepted Answer

The problem of monetary policy lags is perhaps the greatest obstacle facing the Fed in discharging monetary policy as there is a lag between the time that the Fed implements monetary policy changes and the time that those changes affect the economy. This lag can sometimes be several months, making it difficult for the Fed to accurately anticipate the effects of its policy decisions.

Which of the Following Is Perhaps the Greatest Obstacle Facing