Which of the following decisions can the business cycle help businesses make?

• A. When to expand production
• B. When to invest in new technology
• C. How to set prices for goods and services
• D. When to hire or lay off workers

Answer: (D)

Verified step by step guidance

1. Understand that the business cycle refers to the fluctuations in economic activity over time, including periods of expansion and contraction.
2. Recognize that businesses use knowledge of the business cycle to time their decisions strategically, such as expanding production during economic upswings and reducing it during downturns.
3. Identify that decisions like when to invest in new technology are influenced by the business cycle because firms prefer to invest when the economy is growing and demand is rising.
4. Note that hiring or laying off workers is also closely tied to the business cycle, as firms adjust their labor force based on expected demand changes during expansions or recessions.
5. Understand that while pricing decisions are important, they are generally influenced by market conditions and competition rather than directly by the business cycle phases.