Using the Money Supply as the Exclusive Intermediate Target for Policy

Multiple Choice

Using the money supply as the exclusive intermediate target for policy purposes has fallen out of favor for all but which of the following reasons?

A) the velocity of money is unpredictable
B) the various monetary aggregates often send conflicting signals
C) the decision lag for setting money supply targets is too long
D) there is no reliable formula relating changes in interest rates to changes in the money supply
E) raising interest rates may reduce GDP rather than reducing inflation