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In a democracy, politicians may be shortsighted because they want to win reelection. Therefore,
the political process can:
I. add an inflationary bias to monetary policy
II. add a deflationary bias to monetary policy
III. generate a political business cycle in which expansionary policies are pursued to lower
unemployment and interest rates just prior to an election
A. II and III only
B. I only
C. III only
D. I and III only
E. I, II, and III

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In a democracy- politicians may be shortsighted because they want to w.docx

  • 1. In a democracy, politicians may be shortsighted because they want to win reelection. Therefore, the political process can: I. add an inflationary bias to monetary policy II. add a deflationary bias to monetary policy III. generate a political business cycle in which expansionary policies are pursued to lower unemployment and interest rates just prior to an election A. II and III only B. I only C. III only D. I and III only E. I, II, and III