Respuesta :
A. a reduction in the price level, leading to a reduction in employment because of downward wage rigidity.
B. an increase in the real interest rate, leading to an increase in production costs and therefore lower demand for labor.
What Is Financial Policy?
- A country's central bank uses a set of instruments called monetary policy to regulate the total amount of money in circulation, foster economic expansion, and implement measures like adjusting interest rates and altering bank reserve requirements.
- In order to ensure price stability and public confidence in the value and stability of the country's currency, the monetary authority of a country adopts a policy known as monetary policy.
- This policy aims to control either the money supply or the interest rate payable for very short-term borrowing, which refers to borrowing by banks from one another to meet their short-term needs.
A. a reduction in the price level, leading to a reduction in employment because of downward wage rigidity.
B. an increase in the real interest rate, leading to an increase in production costs and therefore lower demand for labor.
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