Use of activist fiscal and monetary policy can bring rapid growth, as was the case in the United States before the 1972 election. One consequence of an activist policy is:
A) use of macroeconomic policy that stabilizes the economy.
B) a political business cycle caused by the use of macroeconomic policy to serve political ends.
C) countercyclical macroeconomic policy designed to help the economy.
D) crowding out as decreases in government spending push out the private business spending.

Question

Quizplus · Accepted Answer

Activist fiscal and monetary policies can lead to a political business cycle where policymakers manipulate these policies to serve political ends. This can result in short-term gains in economic growth but may also lead to long-term negative consequences such as inflation and debt.

Use of Activist Fiscal and Monetary Policy Can Bring Rapid