Which of the following statements is true?
A) Countercyclical monetary policy slows down the growth rate of an economy during an expansion by shifting the labor demand curve to the left.
B) Countercyclical monetary policy slows down the growth rate of an economy during an expansion by shifting the labor supply curve to the right.
C) Countercyclical monetary policy slows down the growth rate of an economy during an expansion by shifting the labor demand curve to the right.
D) Countercyclical monetary policy slows down the growth rate of an economy during an expansion by shifting the labor supply curve to the left.

Question

Quizplus · Accepted Answer

Countercyclical monetary policy aims to reduce the growth rate during economic expansions by increasing interest rates or reducing the money supply, which in turn decreases investment and spending. This leads to a decrease in the demand for labor, effectively shifting the labor demand curve to the left.

Which of the Following Statements Is True