Thursday, December 31, 2009

Economic Growth Exercise question 2

2.


Peak or Boom
Economic activity at highest, Consumer expenditure, investment and export earnings, unemployment will be low, consumer and business confidence will be high, possible increase in wages, business have very good cash flow


Recession
Declining aggregate demand, lower investment expenditure, falling export sales, rising unemployment,


Slump or Trough
High level of unemployment, very low levels of consumer spending, investment and export earnings, poor cash flow


Recovery or Expansion
GDP rises, national income begins to increase, consumption, investment, and employment will also increase





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