When an incumbent politician uses expansionary fiscal and monetary policy to increase the chance of re- election, that politician is generating a/an:
A) political dynasty.
B) political business cycle.
C) a sociological depression.
D) economically sound campaign.

Question

Quizplus · Accepted Answer

The concept of a political business cycle refers to the idea that incumbent politicians may use expansionary fiscal and monetary policies to stimulate the economy leading up to an election in order to increase their chances of being re-elected. This can create short-term economic growth and low unemployment rates, but can also lead to inflation and other problems in the long run.

When an Incumbent Politician Uses Expansionary Fiscal and Monetary Policy