The government stimulates the economy during a recession, while businesses hire new workers post-recession. Government intervention plays a significant role in influencing the business cycle and tackling unemployment.
Stimulating the economy: The government is most likely to try to stimulate the economy during a recession by implementing policies such as lowering taxes or increasing spending on public projects to boost aggregate demand.
Hiring new workers: Businesses are most likely to hire new workers once the recession is over and there is a sustained improvement in business conditions, giving them confidence to incur the costs of hiring and training new employees.
Government intervention: Government interventions play a crucial role in influencing the business cycle by implementing policies to address unemployment, stimulate economic growth, and create a favorable environment for businesses to thrive.
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