Question

In which stage of the business cycle are government interventions, such as stimulus packages, most needed by consumers and businesses? a. Recovery b. Prosperity c. Recession d. Depression reset next

Answer 1

Government interventions such as stimulus packages are most needed by consumers and businesses during the “recession stage.”

In the recession stage of the business cycle, more people are unemployed, businesses struggle, and economic activity overall declines. Stimulus packages serve as an intervention in that they have a goal of boosting the economic state during challenging times such as a depression.