Which of the following statements is true?
A) Countercyclical monetary policy stimulates an economy during a recession by shifting the labor demand curve to the left.
B) Countercyclical monetary policy stimulates an economy during a recession by shifting the labor demand curve to the right.
C) Countercyclical monetary policy stimulates an economy during a recession by shifting the labor supply curve to the left.
D) Countercyclical monetary policy stimulates an economy during a recession by shifting the labor supply curve to the right.

Question

Quizplus · Accepted Answer

Countercyclical monetary policy refers to the actions taken by a central bank to stimulate an economy during a recession. One of the ways in which this can be achieved is by lowering interest rates, which makes investments and borrowing more attractive for businesses and individuals. This, in turn, leads to an increase in aggregate demand, which can be seen as a rightward shift of the labor demand curve. Therefore, the correct statement is that countercyclical monetary policy stimulates an economy during a recession by shifting the labor demand curve to the right.

Which of the Following Statements Is True