According to the political business cycle,after an election,unless the central bank acts inflation is likely to
A)have risen.To counter this the central bank would raise interest rates.
B)have risen.To counter this the central bank would lower interest rates.
C)have fallen.To counter this the central bank would raise interest rates.
D)have fallen.To counter this the central bank would lower interest rates.

Question

Quizplus · Accepted Answer

According to the political business cycle, politicians tend to engage in expansionary fiscal policies, which can lead to inflationary pressures after the election. If the central bank does not act, inflation is likely to have risen. To counter this, the central bank would raise interest rates to reduce demand and counteract inflationary pressures.

According to the Political Business Cycle,after an Election,unless the Central