A Federal Reserve official notes: "A tight monetary policy can force a contraction of the money supply, but an expansionary monetary policy may not achieve an expansion of the economy." The official has described the problem of the:
A) inflexibility of monetary policy tools.
B) change in taxes on monetary policy.
C) cyclical asymmetry of monetary policy.
D) political acceptability of monetary policy.

Question

Quizplus · Accepted Answer

Cyclical asymmetry of monetary policy refers to the idea that monetary policy is more effective at contracting the economy than expanding it, which aligns with the official's statement.

A Federal Reserve Official Notes: "A Tight Monetary Policy Can