Political business cycles result:
a. from the economic fluctuations that occur when discretionary policy is manipulated for political gain.
b. from the recessionary gap that occurs when output falls short of the economy's potential.
c. from the expansionary gap that occurs when output exceeds the economy's potential.
d. when the spending multiplier is manipulated for political gain.
e. from the economic fluctuations that occur when automatic stabilizers are manipulated for political gain.
Question 2
The base year for a price index is the year_____.
a. in which prices were lowest
b. in which prices were highest
c. in which real output was the largest
d. in which prices were stable
e. that serves as a reference point
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