Monetary policy is difficult to conduct because
A)the monetary policy transmission process is long and drawn out.
B)the tools available don't work.
C)politicians frequently block the policy's intended outcomes.
D)the interest rate always rises.
E)it takes several years for the real GDP growth rate to respond to a change in the interest rate.

Question

Quizplus · Accepted Answer

The monetary policy transmission process is complex and involves a time lag before its impacts are realized in the economy. This makes it difficult for policy-makers to gauge the effectiveness of their decisions and adjust policies as needed. Additionally, external factors such as changes in global markets and inflation expectations can also affect the economy's response to policy changes, further complicating the process.

Monetary Policy Is Difficult to Conduct Because