The political business cycle theory predicts that
A) the Fed acts to promote the interests of the general public.
B) the Fed acts to stimulate economic activity before an election.
C) the President's appointments to the Board of Governors will usually be politicians.
D) political factors over which the Fed has no control are most important in explaining the business cycle.
B
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Which one of the following would lead to an eventual change in the total money supply?
A) a customer's cash withdrawal from an ATM B) using a credit card to purchase a new television C) a customer moves funds from her checking account to her savings account D) depositing a paycheck in a bank
The figure above shows a perfectly competitive firm. The figure shows a firm
A) in the short run. B) in the long run. C) at its shutdown point. D) Both answers A and C are correct.
A car dealer sells you a car today in exchange for money in the future. This illustrates which function of money?
A) standard of deferred payment B) unit of account C) medium of exchange D) store of value
Firms that are earning zero economic profits are
A. shutting down in the long run. B. breaking even. C. shutting down in the short run. D. earning less than a normal rate of return.