If There Is a Political Business Cycle and the Federal

question 34

Multiple Choice

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

• A)interest rates and output would rise.
• B)interest rates would rise and output would fall.
• C)interest rates would fall and output would rise.
• D)interest rates and output would fall.

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Definitions:

Warehousing Cost

Expenses related to storing goods in a warehouse, including rent, utilities, labor, and inventory handling charges.

Procurement Aggregation

The combining of procurement requirements for several departments or divisions of a business to secure better terms and prices from suppliers.

Economies of Scale

Cost advantages that a business achieves due to expansion, which typically results in lower per-unit costs.

Transaction Cost

Expenses incurred during the process of buying or selling goods and services, beyond the price of the products.