The Arrow Impossibility Theorem

question 92

Multiple Choice

The Arrow impossibility theorem

• A)explains why people can be rational as well as ignorant at the same time.
• B)explains why voting systems do not consistently represent the preferences of voters.
• C)explains why candidates for public office must represent the preferences of the political middle.
• D)explains why it is impossible, in most cases, to eliminate special-interest legislation after it has become law.

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Definitions:

Dollar-Peso Exchange Rate

The rate at which the currency of one country (USD) can be exchanged for the currency of another country (peso).

Foreign-exchange Traders

Individuals or entities that buy and sell currencies, aiming to profit from changes in exchange rates.

Mexican Government

The federal republic governing structure of Mexico, comprised of executive, legislative, and judicial branches.

Fixed Exchange-rate System

A currency system where the value of a country's currency is pegged to the value of another currency, a basket of other currencies, or another measure of value such as gold.