Public Choice Theorists Argue That Special Interest Groups Are Important

question 44

Multiple Choice

Public choice theorists argue that special interest groups are important to legislators because they:

• A) may be able to influence how their members vote.
• B) raise the cost to legislators of determining how people may vote.
• C) represent the close friends of the legislators.
• D) operate from a public interest perspective.

---

Definitions:

Arbitrage

The practice of buying and selling the same asset in different markets to profit from price discrepancies.

Law Of One Price

An economic theory that suggests the price of identical goods in different markets must be the same after exchange rate adjustments.

Mispricing

An occurrence in financial markets where the price of an asset does not reflect its true value, due to various factors like misinformation or market inefficiency.

Risky-Asset Portfolio

A collection of investments that have a higher risk of loss but also offer the potential for higher returns.