One of the difficulties in implementing monetary policy is:
A)the time it takes to pass new monetary policy once the Fed has decided action is needed.
B)the time it takes monetary policy to have an effect in the economy once enacted.
C)the time it takes to enact monetary policy once the Fed has decided action is needed.
D)All of these make monetary policy difficult to implement.

Question

Quizplus · Accepted Answer

The time it takes monetary policy to have an effect in the economy once enacted is a significant challenge in implementing monetary policy. It can take several quarters or even years for the effects of a change in monetary policy to be fully realized in the economy. While options A and C may also pose some challenges, they are not the primary difficulty in implementing monetary policy. Option D is too broad and encompasses all the choices listed, making it a less specific answer.

One of the Difficulties in Implementing Monetary Policy Is