The federal government attempts to control business cycles because:
A) increases in economic activity could lead to inflation.
B) decreases in economic activity lead to reduced output.
C) decreases in economic activity lead to higher unemployment.
D) all of the above.

Question

Quizplus · Accepted Answer

The federal government attempts to control business cycles to mitigate the negative effects of both the peaks and troughs. Increases in economic activity can lead to inflation, while decreases can lead to reduced output and higher unemployment, making all of the provided reasons correct.

The Federal Government Attempts to Control Business Cycles Because