In the United States,presidential elections occur every four years.If a political business cycle exists in the United States,in which year of a presidential term,all else fixed,would we expect output growth to be lowest?

Question

Quizplus · Accepted Answer

In the context of a political business cycle, output growth is often expected to be lowest in the first or second year of a presidential term. This is because newly elected officials may implement contractionary policies early in their term to address inflation or other issues, allowing time for the economy to recover and for expansionary policies to boost growth closer to the next election.

In the United States,presidential Elections Occur Every Four Years