What Is a Possible Reason for the Fed's Inability to Prevent

question 60

Multiple Choice

What is a possible reason for the Fed's inability to prevent a recession?

• A) The Fed has too much power over M1 and M2 and can flood the money supply.
• B) Much of the data about the economy is unknown when the Fed is making policy.
• C) Firms and individuals do not often understand the goals of the Fed.
• D) The Fed often performs complex and conflicting maneuvers at the same time.

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