Proponents of the notion of a "political business cycle" suggest that
A) the standardized budget is a better indicator of the state of the economy than the actual budget, for political reasons.
B) cyclical swings in the economy are produced by the inherent political instability found in capitalist economies.
C) a possible cause of economic ﬂuctuations is the use of ﬁscal policy by policymakers for political purposes and goals.
D) there is constant political trading among policymakers that tends to make the economic policies of state and local governments procyclical.

Question

Quizplus · Accepted Answer

Proponents of the political business cycle argue that policymakers use fiscal policy to manipulate the economy in order to enhance their chances of reelection. This can lead to economic fluctuations that are timed to coincide with elections. Thus, C is the correct choice. A, B and D do not accurately reflect this view.

Proponents of the Notion of a "Political Business Cycle" Suggest