Predictions Based on the Theory of Political Business Cycles Suggest

question 50

Multiple Choice

Predictions based on the theory of political business cycles suggest that

• A)presidents who succeed in reducing inflation sharply before an election have the best chance to be re-elected even if unemployment increases
• B)achieving a low rate of unemployment before an election is less important than achieving a low rate of inflation
• C)presidents who want to be re-elected should aim for low inflation early in their terms and then try to achieve strong economic growth before the next election
• D)the practice of manipulating the economy before an election seldom pays off since voter behavior is not significantly affected by economic issues
• E)none of the above

---

Definitions:

Liable

Being legally responsible for something, typically involving a financial or legal obligation.

Contract

A lawful agreement among two or more parties that has legal authority and enforceability.

Respondeat Superior

A legal doctrine that holds an employer or principal legally responsible for wrongful actions taken by an employee or agent if such actions occur in the course of their employment or agency.

Unauthorized Acts

Unauthorized Acts are actions taken by an individual or entity that are not permitted or sanctioned by law, contract, or authority.