Question

____________________________ will often cause monetary policy to be considered counterproductive because it makes it hard for the central bank to know when the policy will take effect? a. Altering the discount rate b. Reserve requirements c. Long and variable time lags d. Quantitative easing

Answer 1

Answer:

The correct answer is C. Long and variable time lags.

Explanation:

This phenomenon is determined by the period of time after which the expansionary monetary policy produces an increase in the money supply, which causes the economy to expand. For this reason it is a bit complicated to stop using an expansive monetary policy.