The use of expansionary fiscal and monetary policy just prior to elections is known as the ________.
A)electoral college
B)time-inconsistency problem
C)Watergate scandal
D)political business cycle

Question

Quizplus · Accepted Answer

The use of expansionary fiscal and monetary policy just prior to elections is known as the political business cycle. This is because politicians may want to stimulate the economy just before elections in order to gain popularity and increase their chances of re-election. This cycle involves an increase in government spending, lower taxes, and easy monetary policy, which can result in short-term economic growth but may also lead to long-term problems such as inflation and budget deficits.

The Use of Expansionary Fiscal and Monetary Policy Just Prior