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The Table Below Shows the Payoffs to the Running of Negative

question 32

Multiple Choice

The table below shows the payoffs to the running of negative and positive political ads by two candidates.The payoffs are the percentage increase or decrease in the number of voters willing to vote for the candidate as a result of the campaign styles.  Republican Candidate  Democratic Candidate  Positive Campaign  Negative Campaign  Positive Campaign  Democrat 0% Republican: 0% Democrat:-3%  Republican: +3% Negative Campaign  Democrat: +5% Republican: 5% Democrat 2% Republican: 2%\begin{array}{c}\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Republican Candidate }\\\text { Democratic Candidate }\begin{array}{|l|l|l|}\hline & \text { Positive Campaign } & \text { Negative Campaign } \\\hline {\text { Positive Campaign }} & \begin{array}{l}\text { Democrat } 0 \% \\\text { Republican: } 0 \%\end{array} & \begin{array}{l}\text { Democrat:-3\% } \\\text { Republican: }+3 \%\end{array} \\\hline {\text { Negative Campaign }} & \begin{array}{l}\text { Democrat: }+5 \% \\\text { Republican: }-5 \%\end{array} & \begin{array}{l}\text { Democrat }-2 \% \\\text { Republican: }-2 \%\end{array} \\\hline\end{array}\end{array}
Refer to the figure above.Suppose that the Republican candidate tells the Democratic candidate that he intends to run a positive campaign.The likely result is that:

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the proportion of any additional dollar of income that must be paid in taxes.

Weighted Average Cost

A calculation that takes into account the varying costs of goods or services by weighting them according to their importance or quantity.

Internal Rate of Return

The discount rate that makes the net present value of all cash flows from a particular project zero.

Interest Rate

Interest: the financial charge applied to the borrower by the lender, calculated as a percentage of the principal for asset usage.

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