Describe the Business Cycle and Built in stabilizers.
The Business Cycle and Built in stabilizers.
a. What can the business cycle tell you about the status of our economy today and into the future?
b. Given what you have learned about the U.S. Business cycle over the past 60 years, please explain 4 things you should do
to enhance your personal odds of achieving personal future success.
c. List and explain the 4 phases of the business cycle, including the characteristics of each. Be thorough! You should have
at least 4 characteristics for each phase!
i. You would want to list the 4 phases of the business cycle (in the order that they typically occur) and explain the characteristics of each. Please don’t include Depression as one of them.
ii. Include in your discussion how each phase of the business cycle might impact your life.
d. Explain in detail, 3 possible causes of change in the direction of the business cycle. You are looking for things
that are out of the control of the government. Do not use fiscal or monetary policy tools here.
e. Built-in Stability
1. Explain the difference between discretionary and non-discretionary fiscal policy,
2. Explain the key relationships that supports the built-in stabilizer,
3. Explain thoroughly how it works to reduce inflation
4. Explain thoroughly how it works to reduce recession
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5. Explain why the presence of the built-in- stabilizer is important to managing the macro economy.
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