Time Lags in the Conduct of Monetary Policy Can Cause

Multiple Choice

Time lags in the conduct of monetary policy can cause

A) monetary policy to work in the opposite direction to what was initially predicted by economists.
B) an expansionary policy to have a smaller effect than what was expected by policymakers.
C) monetary expansions to work very quickly but cause monetary contractions to work very slowly.
D) difficulty in the timing of appropriate policy and can even lead to destabilization.
E) short-term monetary policy to work more effectively than long-term targeting.