What is the primary purpose of fiscal policy in relation to economic cycles?

Fiscal policy's primary purpose in relation to economic cycles is to stabilize the economy and promote growth. This involves the use of government spending and taxation to influence economic activity. During periods of economic downturn, such as recessions, fiscal policy can be utilized to increase government spending or reduce taxes to stimulate demand, create jobs, and ultimately support recovery. Conversely, during periods of rapid economic growth, fiscal policy may involve cutting back on spending or increasing taxes to cool down the economy and prevent inflation.

The other options address important aspects of government economic actions but do not capture the primary aim of fiscal policy in the context of economic cycles. Reducing national debt is a goal that may be pursued but is not the main focus of fiscal interventions during different phases of the economic cycle. Similarly, controlling hyperinflation is a specific situation that may require fiscal measures but does not encompass the broader goals of fiscal policy, which are aimed at economic stabilization and growth. Managing international trade relations falls under trade policy rather than fiscal policy, making it irrelevant in this context.