The political business cycle can lead to ________.

Question

Quizplus · Accepted Answer

The political business cycle refers to the tendency of politicians to manipulate economic policies in order to maximize their chances of reelection. This often leads to expansionary monetary and fiscal policies, such as lowering interest rates and increasing government spending, in order to stimulate economic growth and reduce unemployment. However, these policies can also be used for short-term gain and can contribute to inflation and debt in the long run. Therefore, the correct answer is choice D, both A and B.

The Political Business Cycle Can Lead to ________