Assume that political business cycles do not exist.Given this assumption,we would expect,all else fixed,the output growth to be highest in which period?
A)just prior to an election
B)just after an election
C)in the first year of an administration
D)in the second year of an administration
E) none of the above

Question

Quizplus · Accepted Answer

Assuming political business cycles do not exist, there is no systematic relationship between output growth and any particular period related to elections or administrations. Output growth could be high in any period depending on various other factors such as consumer and investor confidence, government policies, global economic conditions, and business cycles. Therefore, none of the given choices would be a reliable predictor of the highest output growth.

Assume That Political Business Cycles Do Not Exist