Durign a contraction phase, also known as a downswing or downturn, the high levels of economic activity found in a boom start to decline. This is because, as rates of output begin to decrease due to bottlenecks, limited labour supply and shortages as a result of the economy nearing maximum capacity, investment starts to decline. In a domino affect, as investment falls, output begins to decrease, unemployment rises and income falls: finally, reducing spending levels. Furthermore, another reason for contractions, as economic growth rises during booms, governments may introduce contractionary policies to ensure growth doesn’t spiral out of control and create hyperinflation. Therefore, governments and the Reserve Bank of Australia utilise monetary policy to raise interst rates or taxes inorder to reduce spending. A final key feature of the contraction phase is how sudden it can occur. As oppossed to the slow build up of economic growth as characterised by an upswing phase, a contraction can begin very suddenly and can sometimes be caused by economic events. For instance, The Great Depression (1929), The Global Financial Crisis (2008) and the COVID-19 pandemic (2020). These may lead to recessions, defined as two successive quarters of falling GDP Growth.