Shifts in monetary policy will
A) stimulate output and employment almost immediately, and this will make it easier for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.
B) stimulate output and employment almost immediately, and this will make it more difficult for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.
C) stimulate output and employment with time lags that are long and variable and this will make it easier for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.
D) stimulate output and employment with time lags that are long and variable and this will make it more difficult for policy-makers to change monetary policy in a manner that will promote macroeconomic stability.

Question

Quizplus · Accepted Answer

Shifts in monetary policy typically have time lags that are long and variable, meaning that it takes time for the effects on output and employment to be realized. This can make it more difficult for policy-makers to determine the appropriate timing and magnitude of changes to monetary policy in order to promote macroeconomic stability.

Shifts in Monetary Policy Will