Describe the notion of political business cycle

Describe the notion of political business cycle. 

E

Expert

Verified

A political business cycle is the perception that politicians are more interested in re-election than in stabilizing the economy.  Before the election, they enact tax cuts and spending raise to make happy voters even though it may fuel inflation.  After the election, they apply the brakes to hold back inflation; the economy will slow and unemployment will increase.  In this view the political procedure creates economic instability.

   Related Questions in Finance Basics

  • Q : Define Final Budget Summary Final

    Final Budget Summary: A document generated by the Department of Finance subsequent to enactment of the Budget Act that reflects the Budget Act, any vetoes to the language and/or appropriations, technical corrections to the Budget Act, and summing up t

  • Q : Finance powerpoint Hi, I am a

    Hi, I am a management student studying in a business school. I have given a case study (attached below in PDF) as evaluation. I was able to get an English version but since i am not familiar with the subject i don't know how to solve this. I would like to know if you can provide any solution f

  • Q : Why do focusing on cash flows rather

    Why do we focus on cash flows rather than profits while evaluating proposed capital budgeting projects? We targeted on cash flows instead of profits while evaluating proposed capital budgeting projects since it is cash flow that changes the valu

  • Q : What is Non-governmental Cost Funds

    Nongovernmental Cost Funds: For lawful basis purposes, employed to budget and account for revenues other than common and special taxes, licenses, and fees or some other state revenues.

  • Q : Security in banking operations Security

    Security in banking operations is a major problem in financial institutions all over the world today. The compromise of banking information and data more often than not leads to fraud. Fraud has become quite a challenge for many banks as any slight br

  • Q : Pitfalls when two companies merge Other

    Other than pricing, some pitfalls that consumers might have to deal with when two major companies merge.

  • Q : Lower for a specified company-the cost

    Normal 0 false false

  • Q : Inflationary expenditure gap or

    Normal 0 false false

  • Q : Financing costs in capital budgeting

    How are financing costs incorporated generally into the capital budgeting analysis procedure? Usually financing costs are captured in the discount or hurdle rate while doing NPV or IRR analysis. Usually the operating cash flows do not comprise

  • Q : Define Claim Schedule Claim Schedule :

    Claim Schedule: It is a request from a state department to the State Controller's Office to distribute payment from a legal appropriation or account for a legal state obligation. The claim agenda recognizes the appropriation or account to be charged,

©TutorsGlobe All rights reserved 2022-2023.