A contractionary monetary policy is likely to lead to ________.
A) a lower supply of labor
B) a lower demand for labor
C) lower real wages
D) lower real interest rates

Question

Quizplus · Accepted Answer

A contractionary monetary policy is designed to slow down economic growth by reducing the money supply and increasing interest rates. This results in a decrease in consumer spending and business investment, leading to a lower demand for labor as companies may need fewer workers to produce goods and services.

A Contractionary Monetary Policy Is Likely to Lead to ________