Assume That the Democrats Always Had a Policy of High

question 41

Multiple Choice

Assume that the Democrats always had a policy of high money growth whereas the Republicans followed a policy of low money growth, and the economy had a standard Phillips curve. Then, if the two parties took regular terms in office:

• A)there would be no political business cycle, but inflation would be higher under the Democrats.
• B)there would be no political business cycle, but inflation would be higher under the Republicans.
• C)unemployment would be lower under the Democrats but inflation would be higher.
• D)both unemployment and inflation would be higher under the Democrats.

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Definitions:

Form Utility

The value added to goods through a change in form, shape, or appearance, to make them more useful or appealing.

Raw Materials

Basic substances in their natural, modified, or semi-processed states, used as inputs to a production process for manufacturing finished goods.

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A process through which a business seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated.

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The process of examining objects, components, or materials for defects using human sight, sometimes assisted by optical instruments.