Question 7:

(a) Why are quarterly movements in a country's GDP measure so important? (1 mark)

(b) What is it called when a country has two successive negative quarters of economic growth? (1 mark)

(c) When the economy is heading into a recession, illustrate and explain using diagrams, how economic policy instruments can be used by the government and the central bank to prevent this from occurring? (6 marks)

(d) Will these instruments work to prevent the onset of recession? (2 marks)