An important problem facing the Fed is that
A) the goals for economic growth and price stability may conflict in the short run.
B) it lost effective control over the monetary base.
C) it has been given responsibility for meeting policy goals, but true control over monetary policy remains with Congress.
D) it has been given responsibility for meeting policy goals, but true control over monetary policy remains with the president.

Question

Quizplus · Accepted Answer

The Fed's dual mandate of promoting economic growth and maintaining price stability may sometimes conflict in the short run. For example, during a recession, the Fed may need to stimulate the economy by lowering interest rates, but this could also lead to inflationary pressures. Therefore, the Fed must carefully balance these goals and make difficult trade-offs. The other options do not accurately describe significant problems facing the Fed.

An Important Problem Facing the Fed Is That