The political business cycle can lead to ________.

Question

Quizplus · Accepted Answer

The political business cycle is when politicians use fiscal and monetary policy to manipulate the economy in order to improve their chances of winning elections. This means that they are more likely to implement expansionary fiscal and monetary policies, which can lead to economic booms in the short run, but can also lead to inflation or a recession in the long run. Therefore, the best choice is D, as it includes both expansionary monetary and fiscal policies. Corruption is not necessarily a direct result of the political business cycle, although it may be a side effect in some cases.

The Political Business Cycle Can Lead to ________