1. Describe what happens in each of the four phases of the business cycle: expansion, peak, contraction, and trough.

2. During which phase is inflation likely to be a problem? When is deflation likely to happen? Why?

3. In 2021 and 2022, the US started to experience high rates of inflation. How did this personally affect you? Name at least two changes you made to adjust for inflation.

4. Inflation can be caused by many factors. Explain how each contributed to inflation:

a) increased government spending during the COVID-19 response, b) supply chain disruption caused by the pandemic, and c) the Federal Reserve pumping more dollars into the economy. Evaluate which factor was the most important one. Why do you believe this?

5. Predict what will happen over the next 12 months in the business cycle. Why do you think this will happen?

REFERENCES FOR THIS QUESTION ARE NEEDED AS WELL.