During a period when output and employment are falling, the government will try to

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During a period of economic recession, the government typically tries to stimulate the economy by encouraging borrowing and spending. This can be done through measures such as lowering interest rates, implementing fiscal stimulus programs like tax cuts or government spending, and encouraging private sector investment. By increasing borrowing and spending, the hope is that businesses will expand and job growth will increase, ultimately leading to economic recovery. Increasing tax rates or reducing government spending, on the other hand, could actually worsen the recession by decreasing consumer and business spending.

During a Period When Output and Employment Are Falling, the Government