If a central bank implements an expansionary monetary policy by lowering interest rates, it is guaranteed that unemployment will decrease immediately in the short run.

When a central bank cuts rates, borrowing costs fall, so businesses and consumers are more likely to take loans and spend money. This extra spending can lift demand for goods, which may lead firms to hire more workers, but the effect is not instant or automatic. The economy may need time for new loans to be used, for firms to adjust production, and for workers to find jobs that match their skills. In addition, if the economy is already near full employment or if wage rigidities keep wages high, unemployment may not fall right away. For example, a sudden rate cut might boost sales in a factory, but it could take weeks or months for that factory to hire enough workers to reduce overall unemployment.