One problem with the ripple effect from the Fed's monetary policy is
A)the fact that the monetary policy transmission process is long and drawn out.
B)that changing the Federal funds target rate seldom has an effect on the markets for reserves and loanable funds.
C)that the Fed's policy sometimes has a large impact on potential GDP as well as its usual impact on aggregate demand.
D)the tight relationship that the Federal funds rate has to aggregate spending.
E)the frequent misalignment of the spread between the Federal funds rate and the Federal funds rate target.

Question

Quizplus · Accepted Answer

The transmission process of the Fed's monetary policy is lengthy, which means that it takes time for the effects of the policy to be felt throughout the economy. This can make it difficult for the Fed to get the desired outcome from its policy decisions.

One Problem with the Ripple Effect from the Fed's Monetary