Regarding the following statistics, explain which phase or turning point of the

Question

Regarding the following statistics, explain which phase or turning point of the business cycles, this economy is going through and define the characteristics of this stage . How would the central bank and the government interfere during this period ?                                                                                                                                      

- Economic growth = 4.4 %    Unemployment rate = 3.9 %      Level of inflation = 12.9 %                 

- Deficit in net exports.      Balanced national savings .       Savings more than Investments .      ( 30pts )                                                   

         ( M > X   )                                             (   T = G )                                                  (   S > I )

Explanation / Answer

The economy has a low unemployment rate lower than general value of 5% of natural rate of unemployment,Inflation rate is high,Deficit in net exports,High Savings than investment, this economy is in phase of expansion.An expansion is characterized by increasing employment, economic growth, and upward pressure on prices. The central bank and government can resort to quantitative easing during this period.

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