Which of the Following Best Defines the Political Business Cycle

question 103

Multiple Choice

Which of the following best defines the political business cycle?

• A)the fact that about every four years some politician advocates greater government control of the Bank of Canada
• B)the potential for a central bank to increase the money supply and so output to help the incumbent get re-elected
• C)the part of the business cycle caused by the reluctance of politicians to smooth the business cycle
• D)the changes in output created by the monetary rule the Bank of Canada must follow

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Definitions:

September 11 Attacks

A series of coordinated terrorist attacks by the Islamic terrorist group al-Qaeda against the United States on the morning of September 11, 2001.

Long-run Path

The trajectory of economic performance or growth when all factors of production can change and adapt.

Market Decline Curve

Graphical representation that shows the decrease in demand or value of a market or product over time.

Equilibrium Points

The state in a market where supply equals demand, and there is no incentive for price or quantity to change.