ABSTRACT
This chapter explores the theme of the interconnections between government and business cycles. Research institutes use certain models to predict developments in macroeconomic variables. A building firm carries out various activities within a variety of markets. The firm has a house construction unit which includes a large department concerned with the construction of new dwellings and a relatively small department dealing with maintenance work on homes and business buildings. The firm also builds offices and factory buildings. The business cycle is the more or less regular fluctuation of expenditure and production in relation to production capacity. Business cycles have an important effect on government finance, on the business results of many companies, on employment and consequently also on the income of many households. The Kondratieff cycle is the cycle with the longest duration. The Kitchin cycle is the shortest one and is caused by stock investments.
