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Purchases of Huggies diapers should

A)remain fairly constant over the business cycle.
B)increase in recessions and remain constant in expansions.
C)decrease in recessions and increase in expansions.
D)increase in recessions and decrease in expansions.

1 Answer

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Final answer:

Purchases of Huggies diapers are likely to remain fairly constant throughout the business cycle because diapers are a necessity for families with infants. During a recession, government assistance programs like TANF, SNAP, and Medicaid see increased usage due to higher unemployment rates. Conversely, during economic expansions, enrollment in these programs typically decreases as more people find employment.

Step-by-step explanation:

The purchasing patterns for products like Huggies diapers are typically unaffected by econominc fluctuations. Therefore, the answer to the question whether Purchases of Huggies diapers should would be A) remain fairly constant over the business cycle. This is because diapers are a necessity for families with babies irrespective of the economic circumstances. The demand for such essential items does not dramatically change with economic downturns or upswings. Goods like diapers are considered inelastic because they are essentials that must be purchased regardless of a family's financial situation.

When considering the business cycle and programs like TANF, SNAP, and Medicaid, during a recession, enrollment in these programs typically increases due to higher unemployment and more people qualifying for assistance. Conversely, during expansionary phases, as employment rises, fewer people need these forms of assistance, and the enrollment may decline.

Necessary Goods and Government Assistance Programs During the Business Cycle

  • In a recession, unemployment rates go up, leading to increased enrollment in TANF, SNAP, and Medicaid.
  • The trough represents the bottom of the economic cycle, with similar effects as a recession.
  • During an expansion, the economy grows, unemployment declines, and fewer people require assistance, so enrollment in these programs tends to decrease.
  • At the peak, the economy is at its best performance; fewer people are unemployed and need government assistance, so the enrollment in public welfare programs is lower.

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