Effects of the Fed's more openness in recent years are all of the following except that
A)there is less uncertainty about policy moves.
B)as a result of less uncertainty, there is more control over future expectations and long term interest rates.
C)a smaller volume of open market operations are needed to hit any fed funds targeted rate.
D)the monetary policy lag is longer.

Question

Quizplus · Accepted Answer

The other options all highlight positive effects of the Fed's increased openness, while D suggests a negative effect. A longer monetary policy lag means it takes longer for the Fed's actions to have an impact on the economy, which could be seen as a disadvantage.

Effects of the Fed's More Openness in Recent Years Are