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

question 99

Multiple Choice

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.

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Definitions:

Released

In a manufacturing or production context, this term refers to products or goods that have been completed and are ready to be shipped or sold.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Year 1

Refers to the first year in a given time series, fiscal period, or timeframe under consideration.

Absorption Costing

An accounting approach that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.