Question

Which of the following is not a limitation to monetary policy?​ a. ​ Because the Federal Reserve System is made up of twelve branches, it is essentially very difficult to get a decision enacted by the Board of Governors. b. ​ Monetary policy has to be carried out through the commercial banking system. c. ​ The fact that fiscal policy is sometimes at odds with monetary. d. ​ The world has become global in all markets including financial markets, and the Fed does not have control over international banks or non-member banks.

Answer 1

Answer: The following is not a limitation to monetary policy: because the Federal Reserve System is made up of twelve branches, it is essentially very difficult to get a decision enacted by the Board of Governors.

The monetary policy have limitation in regard with fiscal policy, governance and other such entities. These limitations are as follow:

The effects of monetary policy by and large happen after some time has passed as they are to be carried out through commercial banks.

Fiscal policies often tend to be at odds or against certain monetary policies and its impact when enforced.

The Fed does not have control over international banks or non-member banks and thus any decision taken by them tends to affect the mere nature of monetary policies implemented by Fed.