Why Are Campaign Contributions So Important for Interest Groups Seeking

question 73

Multiple Choice

Why are campaign contributions so important for interest groups seeking to influence government?

• A) Legislators only grant meetings with interest groups that offer campaign contributions.
• B) Campaign contributions help elect candidates who are friendly to groups' goals.
• C) Groups can offer contributions in return for favorable votes on pending legislation.
• D) Organizations seeking to offer input on a political party's platform are required to make campaign contributions.
• E) There are very few restrictions on campaign contributions, compared to restrictions on lobbying.

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Definitions:

Arbitrage Opportunity

A situation where a trader can make a profit from the price difference of an asset in different markets or forms without taking significant risk.

Risk-free Rate

The theoretical return of an investment with zero risk, often represented by the yield on government bonds.

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 indicates greater volatility than the market, while a beta below 1 suggests less.

Average Returns

The arithmetic mean of the historical returns of an investment, often used as a general indication of its past performance.