Question

Proponents of the notion of a ""political business cycle"" suggest that:______

a. there is constant political trading among policymakers that tends to make the economic policies of state and local governments procyclical

b. the standardized budget is a better indicator of the state of the economy than the actual budget, for political reasons.

c. a possible cause of economic fluctuations is the use of fiscal policy by policymakers for political purposes and goals.

d. cyclical swings in the economy are produced by the inherent political instability found in capitalist economies.

Answer 1

C. a possible cause of economic fluctuations is the use of fiscal policy by policymakers for political purposes and goals

Step-by-step explanation:

The political business cycle is a theory that suggests that different political administrations can come up with different ways to handle the economics of the country. Hence, the fiscal policy and the monetary policy is bound to be different from the previous one in most cases. This results in economic fluctuations as the new policies are based on the political goals of the new regime. Therefore, the political business cycle suggests that a possible cause of economic fluctuations is the use of fiscal policy by policymakers for political purposes and goals.