What do countercyclical fiscal and monetary policies have in common?
i.They are both used to reduce economic fluctuations.
ii.They both work by shifting the labor supply curve.
A) i) and ii) are both true
B) i) and ii) are both false
C) i) is true and ii) is false
D) i) is false and ii) is true

Question

Quizplus · Accepted Answer

Countercyclical fiscal and monetary policies are both used to reduce economic fluctuations, so statement i) is true. However, they do not work by shifting the labor supply curve, making statement ii) false. Therefore, the correct choice is C) i) is true and ii) is false.

What Do Countercyclical Fiscal and Monetary Policies Have in Common