There Are Three Voters and Two Representatives in a Democracy

question 4

Multiple Choice

There are three voters and two representatives in a democracy. Voter 1 supports government spending of $51. Voter 2 supports government spending of $52. Voter 3 supports government spending of $56. According to the median voter theorem, politicians will converge upon a spending bill of:

• A) $51.
• B) $52.
• C) $53.
• D) $56.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in the marketplace, reflecting the value as perceived by the market participants.

Acquiring Firm

This is a company that purchases most or all of another company's shares to gain control over that company.

Replacement Cost

The cost to replace an asset of a company at its current price, without considering depreciation.

Tax Considerations

Factors related to tax regulations and laws that impact financial decisions and strategies, influencing the net outcome of investments and operations of both individuals and corporations.