The outcome of monetary policy can never be certain because
A) unemployment is always changing
B) the concept of a natural rate of unemployment is still not accepted by all policy makers
C) the slope of the AS curve is never clear
D) time lags disrupt policy planning
E) the natural rate of unemployment lags behind the actual rate of unemployment.

Question

Quizplus · Accepted Answer

Time lags can disrupt policy planning and make it difficult to predict the outcome of monetary policy accurately. There are several time lags associated with monetary policy, including the recognition lag, decision lag, implementation lag, and the impact lag. As a result, it can be challenging to determine how changes in monetary policy will affect the economy and whether they will achieve their intended goals.

The Outcome of Monetary Policy Can Never Be Certain Because