Which of the following statements is true? A. Countercyclical monetary policy st

Question

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

Explanation / Answer

Countercyclical monetary policy slows down the growth rate of an economy during an expansion by shifting the labor demand curve to the left.

Because by using various tools such as increasing rates the fed can reduce investments that means lower demand for labor.

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