What Explains the "Follow-The-Leader" Effect of Countries Changing Their Corporate

question 21

Multiple Choice

What explains the "follow-the-leader" effect of countries changing their corporate tax rates in response to changes made by other countries?

• A) Harmonization of accounting standards
• B) Competition for foreign investment
• C) Currencies pegged to another country's currency
• D) None of the above

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Definitions:

Median-Voter Model

A theoretical framework suggesting that the outcome of majority-rule voting systems will reflect the preferences of the median voter.

Political Logrolling

A practice where politicians exchange favors by supporting each other’s proposed legislations or policies.

Median-Voter Model

A model in political science that suggests the outcome of a majority vote is most likely to represent the preferences of the median voter.

Paradox Of Voting

The situation where individual rational actors have little incentive to vote, considering their single vote is unlikely to change the outcome, yet voting occurs on a large scale.