Which of the Following Explains Why There Is a Negative

question 37

Multiple Choice

Which of the following explains why there is a negative correlation between campaign fund-raising and electoral success for incumbents?

• A) FEC rules require this pattern of fund-raising and spending.
• B) Challengers tend to have less name recognition, meaning their early spending is more cost-effective.
• C) Vulnerable incumbents tend to ramp up fund-raising, while safe incumbents need not spend as much time on fund-raising.
• D) Incumbents hope to scare off high-quality opponents by overspending.

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Definitions:

Interest Rate

The fraction of a loan amount charged as interest to the borrower, often shown as an annual percent of the outstanding loan.

New Capital

Additional funds or assets put into a business by the owners or investors intended for the expansion or improvement of the enterprise.

Profits

The financial gain realized when the revenue from an economic activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Industry

A sector of the economy characterized by the production of goods or provision of services within a certain field.