Question 3: Cyclical Components of Real per Capita GDP for Bulgaria, Italy, Sudan, and Turks and Caicos Islands using the Quadratic Trend (Log-scale) 0.4 0.3 0.2 Real per Capita GDP (Log-scale) 201 2 201 4 2016 1982 1992 2010 1986 1996 1970 197 2 1964 197 4 1980 1988 199 4 1978 1998 2002 1976 2004 208 1990 2000 2006 Years Detrended Bulgaria Detrended Italy -Detrended Sudan Detrended Turks and Caicos As evident, there is a positive comovement between the business cycles of Italy and Turks and Caicos Islands, and there is a positive comovement between the business cycles of Sudan and Bulgaria. There is no comovement evident between Sudan and Turks and Caicos Islands, this may be due to the two countries being poor trading partners. Sudan and Bulgaria appear to have a stronger comovement between them than the other countries. This may be due to the two countries having a strong trading relationship, especially in industrial and agricultural products (Wikipedia, 2020). Between 1991 and 1998, the real per capita GDP of Bulgaria and Sudan fell at a similar time, while the real per capita GDP of Italy and Turks and Caicos stayed steady. Bulgaria experienced the end of the Communist rule in 1990 and a new Constitution was adopted which affected its economy and growth (Wikipedia, 2021). Sudan experienced an escalation of the war in the South which affected its economy and growth (Human Rights Watch, 1991). As evident, the worldwide recession of 2008 seemed to only affect Turks and Caicos Islands majorly with a steep fall in their real per capita GDP. On the other hand, Sudan seemed to have a steep rise starting in 2008