The Fed's job in manipulating monetary policy is made harder by the fact that:
A) monetary authorities do not have a good understanding of how monetary policy works.
B) monetary policy is usually pulling the economy in the opposite direction from fiscal policy.
C) the Fed operates in real time and information on recessions becomes available with a lag.
D) monetary policy is hardly ever effective in influencing business fluctuations.

Question

Quizplus · Accepted Answer

The Fed operates in real-time which means that it is making decisions based on current data and trends, but information on recessions and their impacts may not be available until a lag. This makes it harder to manipulate monetary policy effectively.

The Fed's Job in Manipulating Monetary Policy Is Made Harder