Consider a situation in which a future president has appointed Federal Reserve leaders who conduct monetary policy much more erratically than in past years. The consequence is that the quantity of money in circulation varies in a much more unsystematic and, hence, hard-to-predict manner. According to the policy irrelevance proposition, is it more or less likely that the Fed's policy actions will cause real $GDP$ to change in the short run? Explain.

As per the Governance Uselessness Supposition, in the short run, anticipated actions have no effect on real variables such as the unemployment rate or the level of real $GDP$, whereas unforeseen policy actions have an effect on real variables such as the unemployment rate or the level of real $GDP$.

However, whether policy measures are anticipated or unanticipated, there will be no influence on real variables in the long term, according to this argument.In the current scenario, it has been said that Federal Reserve officials are executing the fiscal system in extremely unpredictable manner therefore it may be indicated that new initiatives are very unforeseen.

Unanticipated policy acts, according to the policy irrelevance argument, cause changes in real variables such as real $GDP$.As a result, the Fed's policy measures are more likely to influence real $GDP$ to alter in the short term.