Countercyclical monetary policies| Business & Finance homework help
The Federal Reserve’s countercyclical monetary policies have been moderately effective in moderating business cycle swings. Fed tools like quantitative easing, lowering of interest rates have been used to spur economic growth in slowdowns. Rates were raised to keep inflation under control. Although these measures can reduce recessions in some cases, they may take time to have an impact on the whole economy. Other factors can also impact the business cycles that are not influenced by policies, like changes in consumer perception or world events. It is therefore difficult to say definitively whether or not these policies have reduced fluctuations in the business cycle over time.