Final answer:
The expansion phase of the business cycle is marked by rising productivity and employment. As economic conditions improve, spending increases, which leads to further business growth and a decrease in government program enrollment like TANF, SNAP, and Medicaid.
Step-by-step explanation:
The phase of the business cycle characterized by an increase in productivity and employment is known as the expansion phase. During this phase, businesses and individuals have more confidence in the economy, leading to increased spending in the product markets. The income received from employment in the factor market is used to purchase goods and services, subsequently enabling businesses to hire more workers and increase output. When businesses anticipate improved economic conditions or when innovations such as 3-D printing enhance worker productivity, both output and employment are likely to rise, contributing to economic growth. The expansion phase eventually reaches a peak where highest economic output is realized before entering a contraction phase.
Throughout the business cycle, government programs like TANF (Temporary Assistance for Needy Families), SNAP (Supplemental Nutrition Assistance Program), and Medicaid respond to changes in economic conditions. During a recession, with higher unemployment rates, enrollment in these programs increases as more people qualify for assistance. Conversely, during an expansion, when employment rises and incomes are higher, fewer individuals require support, leading to decreased enrollment in these programs.