How does a contractionary monetary policy affect the labor demand curve in an economy?
What will be an ideal response?
If the government follows a contractionary monetary policy, money supply falls. A fall in money supply causes the price level to fall according to the Quantity Theory of Money. If the price level falls, firms cut down production. As a result, there is a decrease in the demand for labor and the labor demand curve shifts to the left.
Economics
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State-chartered banks that are members of the _____________ System are examined by the Federal Reserve.
Fill in the blank(s) with the appropriate word(s).
Economics
Suppose the price of coffee is $3 each, the price of bagels is $2 each and a person's budget is $40. The relative price of coffee is
A) 1.5 bagels. B) 2/3 of a bagel. C) 13.33 bagels. D) 20 bagels.
Economics