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

question 130

Multiple Choice

Proponents of the notion of a "political business cycle" suggest that:

• A)the cyclically adjusted budget is a better indicator of the state of the economy than the actual budget.
• B)cyclical swings in the economy are produced by the inherent instability found in capitalist economies.
• C)a possible cause of economic fluctuations is due to the use of fiscal policy for political purposes.
• D)there is a trade-off among goals that tends to make the economic policies of state and local governments pro-cyclical.

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Definitions:

Selling Price

The amount a seller charges for a product or service.

Contribution Margin

The amount by which the sales revenue of a product exceeds its variable costs, indicating the contribution towards fixed costs and profits.

Manufacturing Overhead Cost

Indirect costs related to manufacturing that cannot be traced directly to individual products, such as maintenance and factory manager salaries.

Produced Units

The total number of items manufactured by a company during a specific period.