An Expansionary Monetary Policy May Be Less Effective Than a Restrictive

Multiple Choice

An expansionary monetary policy may be less effective than a restrictive monetary policy because

A) the Federal Reserve Banks are always willing to make loans to commercial banks that are short of reserves.
B) fiscal policy always works at cross purposes with an expansionary monetary policy.
C) changes in exchange rates complicate an expansionary monetary policy more than they do a restrictive monetary policy.
D) commercial banks may not be able to find good loan customers.