Question 611 pts

Due to Covid-19, the U.S. economy was in a deep recession. In response, the Fed conducted various expansionary monetary policy to stimulate the economy, ranging from lowering the target Fed Fund rate to near 0% to massive assets purchasing (quantitative easing). Many economists believe that:

Group of answer choices

A. Such Fed policy is effective only in the short run. In the long run, changes in the money supply do not impact real GDP, real interest rate, and employment (money neutrality). Thus, such monetary policy is ineffective in the long run.

B. Such expansionary monetary policy is ineffective in both short and long run.

C. Such Fed policy is effective in both short and long run.

D. It would take years for such Fed policy to have any impact on the economy. Thus, such monetary policy is ineffective in the short run, but is effective in the long run.