A Political Business Cycle may occur if an elected government in power increases the money supply before an election, in the hope that this increase will stimulate the economy and cause a strong economy while an election is taking place

The answer is a. True.

The political business cycle is a theory stating that the incumbent government initially adopts a restrictive monetary policy to reduce inflation and gain a reputation for economic competence. However, before the next elections, it adopts the expansionary monetary policy (in other words, it increases the money supply) to achieve low inflation and unemployment rate on election day. Lowering these two measures, the economy can be considered strong which gives an incentive to vote for the incumbent government.