Analyse the causes of a business cycle according to interventionist approach.

Project Term - Macroeconomics

Topic - The business cycle

Question 1
I. Study the diagram and answer the Questions that follow:

i. Briefly describe the term business cycles.

ii. Label the phases in the diagram above. (Phase 1 to 4)

iii. In which phase is there generally a moderate decrease in spending?

iv. The most severe downturn / downswing (which is seen by some economists as an inevitable part of the economy) is known as ...?

v Which turning point marks the end of an economic prosperity and the start of contraction?

vi. Which number in the diagram is used to indicate the peak point of a business cycle?

Question 2
Analyse the effect of the contraction phase on the vulnerable members of society. (economically marginalised groups)

Question 3
Analyse the causes of a business cycle according to interventionist approach.

Question 4
Distinguish between TWO economic indicators used in forecasting economic activities of the country (use one clearly labelled diagram to illustrate all indicators).

Question 5
Critically evaluate the relationship between tax rate and tax revenue by means of a clearly labeled diagram.

Question 6
Use GDP data below to explain the importance of moving averages in the forecasting of business cycles.