Which of the following best describes the idea of a political business cycle?

1 Fiscal policy will result in alternating budget deficits and surpluses.
2 Despite good intentions, various timing lags will cause fiscal policy to reinforce the business cycle.
3 Politicians will use fiscal policy to cause output, real incomes, and employment to be rising prior to elections.
4 Politicians are more willing to cut taxes and increase government spending than they are to do the reverse.

ANSWER:

Politicians will use fiscal policy to cause output, real incomes, and employment to be rising prior to elections.