The Political Business Cycle Refers to the Possibility That

question 324

Multiple Choice

The political business cycle refers to the possibility that

• A) incumbent politicians will be reelected regardless of the state of the economy.
• B) politicians will manipulate the economy to enhance their chances of being reelected.
• C) there is more inflation during Democratic administrations than during Republican administrations.
• D) recessions coincide with election years.

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Definitions:

Depreciation

The reduction in the value of an asset over time, often due to wear and tear.

Accounting Profit

The net income for a company, calculated by subtracting total expenses from total revenues.

Depreciation

The approach in accounting where the expense of a tangible or physical asset is spread across its lifespan.

Payroll Expense

The total amount of money a company pays to its employees as salaries and wages, including taxes and other deductions.