Which of the Following Makes It Difficult for Monetary Policy-Makers

Multiple Choice

Which of the following makes it difficult for monetary policy-makers to institute policy changes in a manner that will promote economic stability?

A) Monetary policy-makers do not have sufficient tools to alter the supply of money.
B) The time lags between changes in monetary policy and when the changes exert an impact on output and prices are long and variable.
C) Monetary policy is unable to alter short-term interest rates.
D) Even though monetary policy can alter interest rates, there is little evidence that interest rates influence the demand for and prices of housing.