Predictions based on the theory of political business cycles suggest that
A)presidents who succeed in reducing inflation sharply before an election have the best chance to be re-elected even if unemployment increases
B)achieving a low rate of unemployment before an election is less important than achieving a low rate of inflation
C)presidents who want to be re-elected should aim for low inflation early in their terms and then try to achieve strong economic growth before the next election
D)the practice of manipulating the economy before an election seldom pays off since voter behavior is not significantly affected by economic issues
E)none of the above

Question

Quizplus · Accepted Answer

The theory of political business cycles suggests that presidents should aim for low inflation early in their terms and then try to achieve strong economic growth before the next election. This is because voters tend to prioritize inflation reduction over unemployment reduction, and a low inflation rate early in the term provides room for later expansionary policies.

Predictions Based on the Theory of Political Business Cycles Suggest