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

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During a period of falling output and employment, the government will typically try to stimulate borrowing and spending to boost overall demand in the economy. This is often done through policies such as lower interest rates, tax cuts, and increased government spending on infrastructure projects or social programs. By encouraging individuals and businesses to borrow and spend more, the government can help to drive economic activity and support employment levels.

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