Suppose the government announces a permanent increase in annual Government Purchases (G) of $25,000,000. Analyze the impact of this policy on Total Saving (S) if: a) The government announces that it will permanently raise taxes by the same amount immediately. b) The government announces that it will permanently raise taxes by the necessary amount beginning in 3 years. How are your answers affected if the increase in Government Purchases only lasts for 2 years?

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.