Question 7 (8 marks) A. From answers in Question 6 {A and B), what do you conclude about the relationship between GDP growth rate and change in Oil prices? (2 man's) B. Give 2 policy measures as a suggestion to curb dependence of growth on oil (2 x 3 marks = 6 marks) SECTION III- BUSINESS CYCLE Question 6 (12 marks) Figure 7 plots the Price of Brent Oil and GDP of Saudi Arabia between 1990 and 2019 (https://fred.stlouisfed.org/series/DCOILBRENTEU) Figure 7: the price of oil between 1986 and 2020, in USD FRED - Gross Domestic Product for Saudi Arabia (left) Global price of Brent Crude (right) 800,000,000,000 120 700,000,000,000 600,000,000,000 8 500,000,000,000 Current U.S. Dollars 400,000,000,000 U.S. Dollars per Barrel 300,000,000,000 200,000,000,000 30 100,000,000,000 15 1992 1994 199% 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 1970 bo20 Sources: International Monetary Fund: World Bank fred.stlouisfed.org Figure 8 plots important macroeconomic indicator SAUDI ARABIA "GDP growth rate" against change oil price for the SAUDI ARABIA economy between 1990 and 2018 Figure 8: Trends in GDP growth rate and change in oil price between 1986 and 2019 FRED, - Gross Domestic Product for Saudi Arabia (left) - Global price of Brent Crude (right) 30 120 20 80 10 40 Percent Change Percent Change 10 20 -BO 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Sources: International Monetary Fund; World Bank fred.stlouisfed.org