Exhibit 15-3 -In Any Democratic Voting Scheme, Inefficiencies Resulting from the Constant

question 154

Multiple Choice

Exhibit 15-3
-In any democratic voting scheme, inefficiencies resulting from the constant changes in voters' priorities are unavoidable. This principle is called the

• A)median voter theorem.
• B)vote cycling theorem.
• C)convergence of positions hypothesis.
• D)Arrow impossibility theorem.
• E)voting paradox phenomenon.

---

Definitions:

Nominal Rate of Interest

The rate of interest before adjustments for inflation, reflecting the market rate at which money can be borrowed.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, usually a year.

Usury Laws

Regulations governing the amount of interest that can be charged on a loan, designed to protect consumers from excessive rates.

Price Floors

A government- or group-imposed minimum price set above the equilibrium price, preventing market prices from dropping below it.