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Economic Output and the Business Cycle

1. At which point would the government be most likely to try to stimulate the economy?
2. At which point would a business be most likely to hire new workers?

(Note: To make these questions clearer, you may want to include a diagram or graph of the business cycle showing points of interest, such as peaks, troughs, expansions, and contractions.)



Answer :

GinnyAnswer

Final answer:

Governments stimulate economy in contraction phase, Businesses hire in expansion phase.


Explanation:

The Business Cycle and Government Interventions

Government Intervention: Governments are likely to stimulate the economy during the contraction phase of the business cycle to prevent a recession or depression by implementing policies like increased government spending or tax cuts.

Business Hiring: Businesses are most likely to hire new workers during the expansion phase of the business cycle when economic growth is strong, demand for goods and services is high, and production levels are increasing.


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