Your explanations of how monetary policy affects the economy and GDP are correct. One of the limitations of the Fed's capability to execute monetary policy relates to the fact that banks may not increase their lending.In a recession, banks may already have a large quantity of excess reserves because they were curtailing lending due to the downturn in the economy. Even though the Fed may be increasing the money supply, banks don't see many good leading opportunities or businesses are not interested in expanding their operations.As a result, the effectiveness of monetary policy is limited.This set of circumstances occurred during the Great Recession.Are there any other limitations to Fed's actions?