A common complaint of monetary policy is that the Fed might have the right idea with their attempts to increase AD, but

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answerhappygod
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A common complaint of monetary policy is that the Fed might have the right idea with their attempts to increase AD, but

Post by answerhappygod »

A common complaint of monetary policy is that the Fed might have
the right idea with their attempts to increase AD, but it simply
wasn't enough (or maybe it was too much).
Part A- Why is it so difficult for the Fed to increase AD by a
precise amount? Explain.
Part B- Some say that the Fed should just overshoot their policy
decisions so that the Fed avoids doing too little. Explain why
overstimulating the economy may have its own costs.
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