The political business cycle refers to the possibility that:
A) incumbent politicians will be reelected regardless of the state of the economy.
B) politicians will manipulate the economy to enhance their chances of being reelected.
C) there are more recessions prior to elections.
D) recessions coincide with election years.

Question

Quizplus · Accepted Answer

The political business cycle theory suggests that politicians may manipulate the economy to improve their chances of being re-elected. This can be achieved through policies such as increasing government spending or decreasing taxes in the period leading up to an election. Therefore, option B is the best choice.

The Political Business Cycle Refers to the Possibility That