Mia's goal for the company this year is to sell its product line internationally. she feels this will increase profits within the next three years by as much as 30%. Mia is developing a strategy for the company.
An organization's long-term objectives and the plan it has to achieve them are referred to as its strategy. In other words, it demonstrates the strategy for achieving the stated goal. The specific steps taken to accomplish the objectives in accordance with the strategy are referred to as a tactic. A plan outlines the ways by which the outcomes (goals) will be accomplished (resources). Strategy can be predetermined or it can develop organically when an organization competes or changes its surroundings. It entails tasks like strategic planning and strategic thought. Business, operational, and transformational strategies are all types of strategy. The five Ps each stand for a different method of strategy. Plan, Ploy, Pattern, Position, and Perspective fall under this category. These five factors make it possible for a business to create a more effective plan.
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When a corporation first decides to issue stock to the public, it engages in a(n)
a. secondary offering.
b. initial public offering.
c. seasoned equity offering.
d. none of the above
Answer: b. initial public offering.
When a corporation first decides to issue stock to the public, it engages in a initial public offering. An initial public offering occurs when a private company.
In essence, an IPO indicates that a corporation ownership is changing from private to public. As a result, the IPO process is also known as "going public." The term "IPO" refers to an initial public offering. An IPO occurs when a privately held company lists its shares on a stock exchange, allowing the general public to purchase them. Many people think of IPOs as big money-making opportunities—when high-profile companies go public, their share prices skyrocket.
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Larry rauzer purchased $60,000 of whole life. What will the cash value of his policy be at the following anniversary dates? anniversary date cash value 10 year 15 year 25 year.
1. Work: First identify the cash value per unit. 10 years= 89 dollars per unit.
Cash value of his policy is $5,340.
2. Work: First identify the cash value per unit. 15 years= 160 dollars per unit.
Cash value of his policy is $9,600.
3. Work: First identify the cash value per unit. 25 years= 340 dollars per unit. Cash value of his policy is $20,400.
What is the life policy?Life insurance is a contract between a policy holder and an insurer wherein the insurer agrees to pay a sum of money in exchange for a premium at the demise of an insured person or after a specific period of time.
Is life insurance something I need?When you're not around to support them financially, life insurance might step in. Take into account your mortgage and other bills, the amount of lost income, funeral costs, and the cost of the kids' tuition. You can estimate the amount of insurance you'll need by adding these up.
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firm is considering purchasing a machine that costs $55,000. it will be used for six years, and the salvage value at that time is expected to be zero. the machine will save $25,000 per year in labor, but it will incur $7,000 operating and maintenance costs each year. the machine will be depreciated according to five-year macrs. the firm’s tax rate is 40% and its after-tax marr is 15%. should the machine be bought? (please show your work in form of income statement and cash flow statement for all the years.)
The company is considering shopping for a machine that costs $55,000. it will likely be used for six years, and the salvage fee at that point is anticipated to be 0.
The shopping decision relies upon the NPV of the gadget.
If the NPV is superb, the machine should be bought; otherwise should be declined.
SL depreciation (D) = (fee – Salvage fee) / lifestyles years
= (55e,000 – zero) / 6
= 55,000 / 6
= 9,167
net financial savings (NS) = financial savings – operating value – Depreciation
desk
year
D
NS
NS after tax (NAT)
CF = NAT + D
1
9167
25000-7000-9167 = 8833
8833 × (1 – zero.40) = 5299.eight
5299.eight + nine,167 = 14,466.8
25000-7000-9165 = 8835
8835 × (1 – 0.40) = 5301
5301 + 9,100,65 = 14,466
55,000
Now, NPV is completed via Excel
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A bond with a book value of $517,500 is retired (bought back) for $515,000. Which of the following statements is согrect? a. The loss on the debt retirement is $32,500 b. The gain on the debt retirement is $2,500. c. The gain on the debt retirement is $32,500. d. The gain or loss on the debt retirement can't be determined without knowing the initial bond issue price.
Option c. The gain on the debt retirement is $32,500.
The truth of paying returned a debt absolutely, so that it now not exist: Many specialists argue in favor of rapid debt retirement.
The key thing that we tell our customers is that while you retire, so need to your debt be retired, Ken Moraif, senior consultant of Retirement Planners of the USA, these days advised Yahoo Finance live. We sincerely encourage humans to be debt-loose. which means no automobile loans, credit score cards, or mortgages.
Debt can negatively affect your capacity to live off the assets of profits you've got hooked up to pay your payments once you prevent punching the clock. Debt bills subtract from the earnings of Social protection and financial savings in an IRA or other investment cars which you really want to be dwelling your great lifestyles.
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the higher the price, the fewer goods or services consumers will demand. conversely, the lower the price, the more goods or services they will demand.
Customers will seek less goods or services as prices rise. On the other hand, people would demand more goods or services if the price is lower.
What does supply and demand law entail?The link between producers and consumers of a good or service is a fundamental idea in economics. For instance, when the price is high, sellers are motivated to produce more, and vice versa as the price drops.
What makes the law of supply and demand crucial?The link between supply and demand is crucial because it helps to establish the costs and availability of the majority of goods and services in a given market. The interplay between supply and demand eventually balances out in accordance with the tenets of a market economy.
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suppose that a small publisher selling to book distributors has fixed operating costs of $600,000 each year and variable costs of $3.00 per book. how many books must the firm sell to break even if the selling price is $6.00
If the selling price is $6.00, the break-even point will be achieved when the number of books sold is 200,000 units.
Break-even point (BEP) is a situation in which the profit is zero or the company does not gain profit or loss.
Recall that:
Profit = revenue - total cost
Since profit = 0, hence the condition for break-even point is:
revenue = total cost
Revenue = number of units sold x selling price per unit
Total cost = fixed cost + variable cost per unit x number of units sold
In the given problem, given parameters are:
selling price = $6.00
fixed operating cost = $600,000
variable cost = $3.00 per book
Let:
p = number of unit sold
Hence,
revenue = 6 x p = 6p
total cost = 600,000 + 3p
Condition for BEP:
revenue = total cost
6p = 600,000 + 3p
3p = 600,000
p = 600,000/3 = 200,000
Hence, the BEP achieved if the number of books sold is 200,000 units.
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Under the provisions of which of the following can an employee who has served in the armed forces and successfully completed his/her tour of duty, be reinstated upon returning to work in his/her previous position on the job?
USERA
OWBPA
ADA
WARN
The answer of the question is USERA under which an employee who has served in the armed forces and successfully completed his/her tour of duty, be reinstated upon returning to work in his/her previous position on the job
Almost all employers, regardless of size, are subject to USERRA, including the federal government. Although the information in this article mostly refers to private companies, there are similar requirements in the law that apply to employers in the federal, state, and local governments. You should refer any specific inquiries to the State Director of the Veterans' Employment and Training Service, who is listed under the U.S. Department of Labor in the government section of the phone book.The Internet has further USERRA information available. A number of the most frequently asked questions about the law are addressed by an interactive system called The USERRA Advisor.
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you now turn to evaluating the key situational factors in the workplace. you find that the turnover in part-time salespeople is high, so sean does not get to build up much of a relationship with these workers. talking to the staff, you sense that they are indifferent to sean and have no clear idea of, or concern about, his goals. which of the following best describes workplace relations?
Turnover in part-time salespeople is high, so sean does not get to build up much of a relationship with these workers best describes workplace relations.
The workplace can be anywhere, whether within an office, outside in the great outdoors, or even remotely while on the road. No of the environment, the most effective companies have an effective and encouraging environment where employees have access to the resources they need. For leaders to grow a business, it is crucial to understand what a workplace is and how to create a productive environment.
A workplace, also known as a place of employment, is a place where employees carry out duties, jobs, and projects on behalf of their employer. Workplaces can be found outside or within buildings and vary by industry. Some people may work in different locations on different days, and workplaces might be mobile. The development of technology has produced a new kind of workplace.
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question content area top part 1 the conity corporation has an electric mixer division and an electric lamp division. of a $14,000,000 bond issuance, the electric mixer division used $9,300,000 and the electric lamp division used $4,700,000 for expansion. interest costs on the bond totaled $1,000,000 for the year. the above interest costs would be considered a(
The above interest costs would be considered a product sustaining cost.
No matter how many units are produced, sustaining costs are the expenses incurred to keep a product or service line in production. A service sustaining cost is another name for a product sustaining cost. An example of a product sustaining cost is the cost of product design. An illustration of a product sustaining cost is design costs. The amount of time designers devote to creating and refining the final product, the mould, and the manufacturing process determines design expenses over time. Product development costs, engineering change costs, and marketing expenses for the introduction of new products are other instances of costs associated with maintaining a product.
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activity-based costing determines the cost of activities and traces their costs to cost objects on the basis of the cost object's utilization of units of activity.
activity-based costing determines the cost of activities and traces their costs to cost objects on the basis of the cost object's utilization of units of activity.
the given statement is true.
Activity-Based Costing: Definition of Method and Benefits.
Using the activity-based costing method, overhead and indirect costs are allocated to related goods and services. In contrast to conventional costing techniques, this accounting method of costing acknowledges the connection between costs, overhead activities, and manufactured goods, allocating indirect costs to products less arbitrarily. However, some indirect costs, like the salaries of the management and office staff, are challenging to relate to a specific product.
Since activity-based costing improves the reliability of cost data, it produces nearly true costs and more accurately categorizes the costs incurred by the company during its production process. ABC is primarily used in the manufacturing industry.
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what is a discount bond? multiple choice question. discount bonds are junk bonds that are rated below investment grade. discount bonds are bonds that sell for less than the face value. discount bonds are bonds with short maturities. discount bonds are bonds that a distressed corporation sells at fire sale prices to raise emergency funds.
A discount bond pays the bondholder the face value at maturity.
A discount bond is one that has been issued for a lower price than its face value. Discount bonds may also refer to bonds that are presently trading on the secondary market for less than their face value. If a bond is sold for a large discount from par value, typically 20% or more, it is said to be a deep-discount bond.
A discount bond is provided at a price that is less than the going market rate. Investors pay a price less than the bond's face value when they purchase it at a discount. It does not necessarily follow that it provides better returns than other bonds, though.
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question 2 options: please provide your response to the nearest integer with no comma or $ sign. a tractor for over-the-road hauling is purchased for $51,000. it is expected to be of use to the company for 6 years, after which it will be salvaged for $3,000. calculate the depreciation deduction and the the book value during each year of the tractors life. using straight-line (sln) depreciation, provide depreciation and book value for year 5. depreciation for year 5
The book value and the depreciation deduction for each year of the tractor's life. Provide depreciation and book value using straight-line (sln) depreciation; the result is $14333.33 for year 5.
What is purchase example?10,000 pairs of shoes are ordered by Shoes Unlimited from a foreign vendor. This entails the issuing of a purchase agreement, which is a formal declaration by the business that it will buy the specified kind and number of shoes. They act as legally enforceable document of the goods/services which were ordered and serve as a significant tool for buyers by formalizing specifications and pricing.
Briefing:Straight line depreciation:
straight-line method=cost of assets-salvage value/expected life
=$51,000-$3,000/6
=$50,500
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in order to be useful to managers, managerial accounting reports should possess all of the following characteristics except a.provide objective measures of past operations and subjective estimates about future decisions b.be prepared in accordanc
Ensure your preparation follows generally recognized accounting rules.
What Are Accounting Principles?Accounting standards are the guidelines that companies and other organizations must follow when disclosing financial information. These rules regulate the terminology and practices that accountants must use, which facilitates the analysis of financial data.
What types of accounting principles are there?Accounting standards like GAAP and IFRS require businesses to record and report financial information in their books of accounts in accordance with preset guidelines and regulations called accounting principles. These standards help businesses provide accurate and honest financial accounts.
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rolling company bonds have a coupon rate of 6.60 percent, 23 years to maturity, and a current price of $1,216. what is the ytm? the current yield?
5.11% is the ytm.
5.43% is the current yield.
Yield to maturity = interest+(redemption value-market value)/years to maturity / (redemption value+market value)/2
66+(1000-1216)/23 / (1000+1216)/2 = 56.608/1108 = .05109*100 = 5.11%
Current Yield =( interest / market price)*100 = 66/1216 =.05427*100 = 5.43%
Yield to maturity (YTM) is the total return a bond would make if it paid all the interest and repaid the principal. YTM is basically the internal rate of return (IRR) of holding a bond to maturity.
The current yield of a bond is the annual income from the investment, including interest and dividend payments, divided by the security's current price. Yield to maturity (YTM) is the expected total return from holding a bond to maturity.
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soar incorporated is considering eliminating its mountain bike division, which reported a loss for the recent year of $4,200 as shown below. segment income (loss) sales $ 1,080,000 variable costs 872,000 contribution margin 208,000 fixed costs 212,200 income (loss) $ (4,200) if the mountain bike division is dropped, all $872,000 of its variable costs are avoidable, and $63,660 of its fixed costs are avoidable. the impact on income for eliminating this business segment would be:
The right response is choice b. $131,500 less would be available for the business segment.
The calculation of the contribution margin is crucial in managerial accounting. It is how much all complete income less all out factor costs. It plays a significant role in the break-even analysis calculation.
What is margin for contributions?According to Knight, "Contribution margin shows you the aggregate amount of revenue available to cover fixed expenses and provide profit to the company after variable costs." This could be thought of as the portion of sales that helps pay for fixed costs.
How is Contribution Margin Calculated?The contribution margin is determined by dividing variable costs by revenue. The formula for determining the contribution margin ratio is Revenue / (Revenue - Variable Costs).
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Full Question = Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $3,200. The division sales for the year were $1,052,000 and the variable costs were $862,000. The fixed costs of the division were $195,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
a. $58,500 decrease.
b. $131,500 decrease.
c. $55,300 decrease.
d. $190,000 increase.
e. $190,000 decrease.
requires all customers to sign a release that contains a clause that releases kings from all liability in the event of an injury occurring during an amusement park ride, no matter who is at fault. this is an example of a. a covenant not to compete. b. an exculpatory clause. c. an adhesion contract. d. none of the choices.
The above contract is an example of an adhesion contract. The correct answer would be option C.
An agreement in which one party has a significant advantage over the other in determining the parameters of the contract is known as an adhesion contract. A standard set of terms and conditions that are the same as those provided to other customers is required for the existence of a contract of adhesion. Those terms and limitations are non-negotiable, so the contract's weaker party must accept it as written rather than asking for clauses to be added, deleted or amended. Boilerplate contracts and standard contracts are other names for adhesion agreements.
Adhesion contracts are frequently used for insurance, leases, car purchases, loans and other activities where there will be a large number of clients who will all fall under some type of common form of agreement.
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the same year that derek jeter, one-time shortstop for the new york yankees, received an annual salary of $23.2 million, the president of the united states received an annual salary of $400,000. if the president of the united states actually contributed more to society than derek jeter, we can conclude that:
If the president of the united states actually contributed more to society than derek jeter, we can conclude that: factors other than marginal revenue product probably explain the salary differences.
What is marginal revenue ?Marginal revenue can be defined as the way in which a company or organization revenue or income increase due to the sales of extra unit mof output.
Based on the given scenario Derek Jeter tend to have annual salary of the amount of $23.2 million that the one of the president which is $400,000 in a situation where the president contribute more into the society despite earning lesser income this may occur as a result of marginal revenue product that explain the salary differences.
Therefore this is an example of marginal revenue.
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the business impact analysis (bia) is created after the business has created a business continuity plan (bcp) group of answer choices true false
It is true that the business impact analysis (bia) is created after the business has created a business continuity plan (bcp).
A business impact analysis (BIA) is a methodical procedure to ascertain and assess the possible impacts of a disruption to crucial business operations as a result of a catastrophe, accident, or emergency. The business continuity plan of an organization must include a BIA (BCP). It has an investigative component to find any threats and vulnerabilities and a planning component to create risk-reduction plans. A business impact analysis report that details the potential risks unique to the enterprise under study is the end result.
Every organizational component depends on the continuing operation of every other component, which is one of the fundamental presumptions behind a BIA. In the event of a crisis, some are more important than others and call for a larger deployment of finances and operational resources.
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Led by their chief scientist mark weiser, what organization was one of the first groups to explore ubiquitous computing?.
Weiser is widely considered to be the father of ubiquitous computing, a term he coined in 1988. Within Silicon Valley, Weiser was broadly viewed as a visionary and computer pioneer, and his ideas have influenced many of the world's leading computer scientists.
Describe the operation of ubiquitous computing?In the concept of computing known as ubiquitous computing, every action or object is connected to information processing. As well as integrating microprocessors for data exchange, it requires tying electronic devices together. The availability and connectivity of devices that use ubiquitous computing are constant.
What characteristics distinguish ubiquitous computing?Consideration of the human element and setting the paradigm in a human environment rather than a computational environment are two important characteristics of ubiquitous computing. Using less expensive CPUs will result in a reduction in the amount of memory and storage needed. real-time attributes are being captured.
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During a meeting, a senior manager became upset over an issue and used profanity when responding to lower-level managers. The behavior disrupted the whole company. Which organizational element of ethics did this manager violate?
The manager broke the organizational culture's code of ethics.
What is an organizational ethics?According to Reference for Business, organizational ethics are the principles and standards by which businesses conduct themselves. Acts of fairness, compassion, honesty, honor, and responsibility are the finest ways to show these qualities.
Every organization has a set of ethical principles that direct its actions and decision-making in order to maximize production and uphold its good name. By following rules and standards, ethical behavior makes sure that staff members accomplish their task with honesty and integrity and that the organization's goals are met. The twelve basic ethical principles are: honesty, fairness, leadership, integrity, compassion, respect, responsibility, loyalty, observance of the law, openness, and consideration of the environment.
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In recent years, various forms of media—newspapers, television stations, radio networks, and even blogs—are increasingly owned by.
In recent years, the various forms of media- the newspapers, television stations, radio networks, and even blogs are increasingly owned by a small number of corporations.
What is media?In mass communication, media refers to the channels of communication or technologies that are used to transmit and store information or data. The phrase is applicable to various facets of the mass media communications industry, including print media, publishing, the news media, photography, film, broadcasting (radio and television), digital media, and advertising. The invention of early writing and paper, which made it possible for longer-distance communication networks like mail, including in the Persian Empire and Roman Empire, could be seen as the emergence of early forms of media. Authors like Howard Rheingold have framed early forms of media as early forms of writing and human communication, like the Lascaux cave drawings. According to H.L. Mencken, mass media first appeared in American usage in 1923.
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If an organization deals successfully with change and has created procedures and systems that can be adjusted to the environment, the existing security improvement program will probably continue to work well.a. Trueb. False
If an organization deals successfully with change that can be adjusted to the environment, the existing security improvement program will probably continue to work well is a true statement.
The current security enhancement program will probably continue to function well if a company properly manages change and has developed policies and systems that can be modified to the environment. A company can better understand what happened and how after an incident with the use of digital forensics.
The concept of an organization refers to how firms are set up and how that arrangement enables them to achieve their objectives. Businesses are often built to concentrate on either making a profit or helping society. A company is considered a for-profit entity when it prioritizes making money.
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which of the following are examples of reverse discrimination? multiple select question. cameron, an african american owner of a restaurant, frames a policy that favors asians over african americans. jaclynn, an african american ceo of a start-up, formulates a policy that favors hiring of african americans over individuals from other races. christopher, an african american store manager, hires only african americans even though they are less qualified than candidates from other races. deliana, an african american recruitment manager, is biased in recruiting white women for a coveted post in her company.
Christopher, an african american store manager, hires only african americans even though they are less qualified than candidates from other races are examples of reverse discrimination.
Reverse discrimination refers to the treatment of individuals of a dominant or majority group less favourably than those from a minority or historically underrepresented group. Ethnicity, gender identity, nationality, colour, religion, sex, or sexual orientation can all be used to describe groups.
Many white individuals and some black people perceived the introduction of compensatory programmes and policies, such as affirmative action, in the early to mid-1970s as reverse discrimination. During this time, these programmes sought to undo the consequences of prior discrimination in both the public and private sectors by concentrating on the underrepresentation of women and ethnic minority groups.
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which statement are true? (select all that apply.) multiple select question. specific identification, weighted average cost, lifo and fifo are generally accepted costing methods. the inventory methods apply to both perpetual and periodic inventory systems. the inventory costing methods determine the amount of the debit to cost of goods sold and credit to inventory. the inventory method used must correspond with the actual physical flow of goods.
The inventory methods apply to both perpetual and periodic inventory systems. Specific identification, weighted average cost, LIFO and FIFO are generally accepted costing methods. The inventory costing methods determine the amount of the debit to Cost of Goods Sold and credit to inventory are true.
The stock strategies practice to each perpetual and periodic stock systems. The stock costing strategies decide the quantity of the debit to Cost of Goods Sold and credit score to Inventory. Specific identification, weighted common fee, LIFO and FIFO are commonly familiar costing strategies.
Overstating the finishing stock will have an effect on a business's earnings statement. The overstated finishing stock will lessen the fee of the products offered withinside the equal amount, which decreases the cost related to the earnings statement.
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jim ryan deposited $8,000 at national bank at 6% interest compounded quarterly. what was the effective rate (apy)?
The effective annual rate for $8,000 that jim ryan deposited at bank with 6% interest compounded quarterly was 6.14%
What is effective annual rate?It is the real return on a savings account or any interest paying investment when the effects of compounding over time are taken into account. It also reflects the real percentage rate owed in interest on a loan, a credit card, or any other debt.
How to calculate the effective annual rate?
The formula for effective rate is
r = (1 + (i/n))^n - 1
where n = 4 (because it's compounded quarterly
i = 0.06 (the interest from the national bank)
r = ( 1 + ( 0.06 / 4))^4 - 1
= (1.015)^4 - 1
= 0.0614
= 6.14% (rounded)
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which of the following arises when investors decide to copy the observed decisions of other investors or movements in the markets rather than follow their own beliefs and information.
Herd-behavior arises when investors decide to copy observed decisions of other investors or movements in markets rather than follow their own beliefs and information.
What is Herd-behavior?Individuals acting in unison without a central point of control are said to be acting as a herd. Animals behave in herds, packs, flocks of birds, schools of fish, and other similar groups. Humans also exhibit this behavior. All sorts of human-based herd behavior, including voting, protests, rioting, general strikes, sporting events, religious gatherings, and opinion formation in daily life. An integrated approach to herding was offered by Raafat, Chater, and Frith, who focused on two crucial issues: the ways in which ideas or actions are passed from one person to another and the patterns of connections that exist between them. They argued that combining several herding behavior theories sheds light on how broadly the concept may be used, from economics to cognitive neuroscience.
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prevosti farms and sugarhouse pays its employees according to their job classification the following employees make up suarhouse's staff
The following employees work at Prevosti Farms and Sugarhouse and are paid in accordance with their job classification: Employee id Number.
An employee id number is what?Employers give each employee a special code known as an employee ID number. Any other name that sounds similar to "employee number" or "employee code" can also be used to refer to this identification code. Because employee IDs identify a specific person, they also identify personal information and other data that is crucial to the organization. The address, SSN, payroll information, and other information can be included. Although issuing employee IDs is not required, as a company expands and hires more people, the benefits become increasingly clear. Although employee identification cards are not necessary for tax purposes, they can improve record-keeping for businesses.
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suppose that consumers decide to save less and spend more. what effect would this have in the market for loanable fund
It will result in higher interest rates and a decrease in the amount of money lent.
What influences the market for loanable funds?All Credit, lending, and borrowing The need for loanable money will rise as individuals and businesses increase their borrowing, credit, and loans. The need for loanable funds will decline as loans, credit, and borrowing by individuals and businesses decline.
How can higher savings lead to lower interest rates?Savings are the foundation for investment since giving up consumption opens the door for investment in common goods. A larger tendency to save expands the available funds and lowers the interest rate.
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discuss whether the project is feasible by addressing each of the three triple constraint components: scope, cost, and timeline.
According to the triple constraint theory, any project will have three constraints: time, scope, and budget.
What are a project's three triple constraints?The three basic constraints that project managers must be aware of are time, scope, and money. These are sometimes known as the triple limits or the project management triangle.
What are the three project restrictions and how can you define each one with examples?For instance, you have given the project a time limit when you set a completion and release date deadline. According to the triple constraint theory, any project will have three constraints: time, scope, and budget. And these restrictions are connected to one another.
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which of the following best describes the idea of a political business cycle? group of answer choices politicians will use fiscal policy to cause output, real incomes, and employment to be rising prior to elections. politicians are more willing to cut taxes and increase government spending than they are to do the reverse. despite good intentions, various timing lags will cause fiscal policy to reinforce the business cycle. fiscal policy will result in alternating budget deficits and surpluses.
Politicians manipulate the economy to increase their chances of re-election. This best describes the idea of the political business cycle.
Political business cycles are fluctuations in economic activity caused by external intervention by political actors. The term political business cycle is mainly used to describe stimulating the economy just before an election to increase the chances of the current administration's re-election.
Despite many attempts to prove their existence, empirical evidence of political business cycles remains rather vague.
The theory of the political business cycle is based on several assumptions. Economists generally agree that there is a short-term trade-off between capacity utilization and employment in the economy, and the rate of inflation.
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