If There Is a Political Business Cycle and the Federal

question 36

Multiple Choice

If there is a political business cycle and the Federal Reserve supports the incumbent,then we should expect that prior to elections the Fed would

• A)raise interest rates to shift aggregate demand left.
• B)raise interest rates to shift aggregate demand right.
• C)reduce interest rates to shift aggregate demand left.
• D)reduce interest rates to shift aggregate demand right.

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