Booms / dips in economic growth can occur due to a number of reasons:

1. Increase in aggregate demand caused by:

An increase in consumption – this may be caused by: a rise in income levels, an decrease in interest rates, house price inflation

A rise in the level of government spending

A balance of payments surplus

2. Labour shortages

If there are shortages of workers in specific areas it means that the economy will not be able to utilise its resources efficiently and therefore economic growth will slow

3. Increase in demand for imports

This will worsen the balance of payments deficit